Preamble

The House met at half-past Eleven o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — TREASURY

The Chancellor of the Exchequer was asked—

Working Families Tax Credit

Mr. Derek Twigg: How many people he estimates will be eligible for the working families tax credit in the north-west in the next 12 months. [101765]

Dr. Nick Palmer: How many people have contacted the working families tax credit response line in the east midlands. [101772]

Mrs. Louise Ellman: What assessment he has made of the number of people benefiting from the working families tax credit in Liverpool, Riverside. [101773]

The Paymaster General (Dawn Primarolo): I understand, Madam Speaker, that my right hon. Friend the Chancellor of the Exchequer has informed you and the shadow Chancellor that he is at the G20 meeting in Berlin and therefore is not with us today. He is representing the Government at the Finance Ministers meeting.
It is estimated that in 2000–01—the first full year of the working families tax credit—about 200,000 families in the north-west will be in receipt of the credit.
The response line for the working families tax credit and disabled person's tax credit had handled 780,000 inquiries nationally up to 30 November. In the Central and Anglia TV regions, the response lines have handled about 162,000 calls. A more detailed breakdown is not available.
Reliable estimates for the number currently in receipt of the working families tax credit in Liverpool, Riverside are not yet available, but, on the basis of the known family credit figures for that constituency and expected eligibility nationally for the working families tax credit, the estimated number who may be eligible is 2,600 families.

Mr. Twigg: Is my hon. Friend aware that almost half a million children in the north-west live in households that earn less than half the national income, and that thousands

in my constituency live in poverty? My constituency has the highest child mortality rate in England, so poverty is an important issue to me. Is there not a sharp contrast in the approach of the Government and that of the Opposition, who did nothing during their 18 years in office, whereas we have made a start on attacking poverty with the working families tax credit, the new deal for lone parents and a record rise in child benefit? Will my hon. Friend give me a guarantee that the Government will give the highest priority to the attack on poverty?

Dawn Primarolo: As my hon. Friend may know, the combination of the rises in child benefit, the working families tax credit and the minimum wage will lift 800,000 families out of poverty. The Government have declared their aim of eradicating child poverty over the next two decades. That is in stark contrast to the approach of the official Opposition, who say that they will abolish the working families tax credit and take all that money away from those families.

Dr. Palmer: All those with whom I have discussed the working families tax credit are extremely positive. The main reservation is whether we will succeed in reaching the great majority of those who are entitled to it. Is my hon. Friend satisfied that we are doing all that we can in that respect, or could we use Inland Revenue records to contact people who may not yet have claimed, or undertake other activities for that purpose?

Dawn Primarolo: As I said, the response line has taken 780,000 calls. The number of calls to the tax credit office is 1.5 million, the number of applications issued is 450,000, and the number of claims returned by 30 November 1999 for working families tax credit is 320,000. I can assure my hon. Friend that the Government will be watching closely to ensure that all the families entitled to the working families tax credit receive it.

Mrs. Ellman: I welcome my hon. Friend's answer. It is clear that the working families tax credit, together with employment opportunities, allows individual families a way out of poverty and boosts local economies at the same time. What additional support may be available through child care support offered by the Government? Can my hon. Friend make an assessment of the implications for my constituents in Liverpool if the Conservatives and Liberal Democrats continue with their opposition to the working families tax credit, which they displayed by voting against it at various stages?

Dawn Primarolo: As my hon. Friend knows, the working families tax credit is linked to a child tax credit to pay for child care arrangements. That has been hugely welcomed by families who want to return to work and by employers, who see that as an advantage to them in the recruitment and retention of valued staff. The official Opposition condemn the working families tax credit and announce that they will withdraw it, but they will have to explain to those people affected why they will force on them a tax rise averaging £24 a week, and why they will deny women access to paid child care so that they can stay in the labour market.

Miss Julie Kirkbride: Labour Members do not seem to understand that the working families tax


credit merely replaces family credit, which was a successful benefit doing exactly what the Government claim that the working families tax credit will do—make work pay. One of the reasons why the Opposition dislike the working families tax credit is that it extends the benefit far too high up the income scale and includes people on top rate tax. Will the hon. Lady tell us how many people in the north-west who pay top rate tax will receive the working families tax credit, including the number of people earning £38,000 a year, which is the highest income on which one can still be eligible for the working families tax credit?

Dawn Primarolo: There we have it: the official Opposition now confirm that they will abolish the working families tax credit. As the hon. Lady knows, the total number of people eligible to claim family credit was 800,000; working families tax credit will go to 1.4 million families. Of those families claiming the working families tax credit, 70 per cent. have a total income of £17,000 or less a year. She will need to explain to them why she wants to put their tax up and take that credit away from them.

Mr. Desmond Swayne: What estimate has the hon. Lady made of the impact on the average level of wages in the north-west, the east midlands and Liverpool, Riverside of the working families tax credit? Has she given any consideration to the possible increase in the level of informal cash payments between employer and employee?

Dawn Primarolo: As the hon. Gentleman knows, the minimum wage has had the biggest impact on poverty pay in Britain—another policy that the Opposition opposed and say that they will revoke if they are ever elected. The hon. Gentleman should concentrate on how to deal with poverty wages and support families. [HON. MEMBERS: "Answer."[The answer is that the Opposition do not want to support families or tackle poverty.

Mr. David Heathcoat-Amory: Could the Paymaster General explain why the working families tax credit is shown as a tax cut in the national accounts even though all the national and international accounting conventions and the Office for National Statistics insist that it should be shown not as a tax cut but as an item of public expenditure? Will she confirm—I see her hastily conferring with her right hon. Friend the Chief Secretary—that, if those fiddled figures are corrected, the increase in the tax burden since the general election, to which the Chancellor, although he is absent today, has finally admitted this week, would be even higher than has been recorded, both now and by the end of the Parliament?

Dawn Primarolo: The right hon. Gentleman knows full well that the calculation for the tax credit follows the same procedure as, for instance, mortgage interest relief at source did under the Conservative Government. Instead of arguing and pursuing something that he knows to be incorrect, he will need to explain to working families in his constituency why he wants to take the credit away from them, increasing their tax burden by an average of £24 a week.

Employment (West Midlands)

Mr. Michael J. Foster: What assessment he has made of the impact of his macro-economic policies on levels of employment and unemployment in the west midlands. [101766]

The Chief Secretary to the Treasury (Mr. Andrew Smith): In the west midlands region, as in the rest of the United Kingdom, we have created a sound and credible platform of economic stability that will help us attain our objective of high and stable levels of growth and employment. Since the election, employment in the west midlands has risen by 53,000 and unemployment has fallen by 14,000, both broadly in line with UK trends.

Mr. Foster: I thank my right hon. Friend for that answer. Is he aware that, in Worcester, unemployment has fallen by 38 per cent. since April 1997? Would he put that down solely to the stability brought about by giving the Bank of England independence, or would he, like me, agree that positive contributions have also been made by the national minimum wage, the working families tax credit, the new deal for the unemployed and the £40 billion extra money to be spent on our schools and hospitals?

Mr. Smith: Yes indeed. On the platform of stability that we have created by the decision to which my hon. Friend refers, 193,000 people in the west midlands have benefited from the national minimum wage, 125,000 families have benefited from the working families tax credit, and 36,000 young people have been helped off the dole and into jobs thanks to the new deal. Let us also applaud the businesses in the west midlands and their work forces for making a success of that region's crucially important economy.

Mr. Owen Paterson: Table B9 of the pre-Budget report shows that, despite recent reassurances, the take from fuel duty will increase dramatically from £21.6 billion this year to a massive £23.5 billion—

Madam Speaker: Order. I do not have the material before me, but is it related to the west midlands?

Mr. Paterson: Yes.

Madam Speaker: As a west midlands Member, I know where the boundaries are, and I wanted to make quite sure.

Mr. Paterson: I am delighted to share the same region as you, Madam Speaker. Can the Minister name one business in the west midlands that the Government's vicious attack on all road users has made more competitive; and will he cite the number of people who have been made unemployed in the west midlands haulage industry?

Mr. Smith: Last month, Johnson Automotive announced another 500 jobs and a new manufacturing plant in the west midlands to produce parts for the new Mini. That is only one of many firms that have extra confidence in the west midlands. I am sure that the


hon. Gentleman's constituents, like others in the region, will welcome my right hon. Friend the Chancellor's decision to end the fuel duty escalator that the hon. Gentleman's party introduced, and to ensure that any increases above inflation will be dedicated to public transport and road building, for the benefit of his constituents and the success of a critically important economy.

Mutual Societies

Mr. Peter L. Pike: What recent discussions he has had with the Building Societies Association regarding mutuality. [101767]

The Economic Secretary to the Treasury (Miss Melanie Johnson): I had the pleasure of addressing the Building Societies Association annual lunch on 11 November. I have been engaged in regular correspondence with building societies, setting out the Government's position on a range of issues.

Mr. Pike: Although the measures that the Government have recently taken to protect building societies and the increasing number of people who sign motions are welcome, do my hon. Friend and the Government endorse the decision of members of the Leek United, who have clearly said no to predators and carpetbaggers? Does she agree that that shows that the Government and building societies believe that long-term advantages outweigh short-term cash in hand, and that there is a future for mutuality and building societies in the 21st century?

Miss Johnson: I thank my hon. Friend for his welcome for our moves to amend secondary legislation, and I emphasise that I share his view of the role that building societies play. We acknowledge the variety and choice that building societies bring to the savings and loans market. They enhance competition to the consumer's benefit. Smaller societies in particular can provide a regional focus and high-quality finance jobs in our regions. They often have a close understanding of their local markets, and we value their contribution to the UK economy.

Debt Relief

Mr. Andrew Reed: What discussions he has had since the Cologne summit with the IMF on debt relief for the world's poorest countries. [101769]

The Economic Secretary to the Treasury (Miss Melanie Johnson): My right hon. Friends the Chancellor and the Secretary of State for International Development wrote to the managing director of the International Monetary Fund and the president of the World Bank on 1 December to press for countries to be brought forward quickly under the new debt relief initiative agreed at this year's annual meetings. In addition, my right hon. Friend the Chancellor met the managing director of the IMF and the president of the World Bank on 7 December.

Mr. Reed: I thank my hon. Friend for that reply. While it is appreciated that there is a need to speed up the process, and especially the heavily indebted poor

countries initiative, will she also ensure that, in future discussions, the measures are more closely linked to poverty reduction in the countries that receive the benefit? We can thus ensure that all moneys are well spent and attack the real problems of world poverty.

Miss Johnson: I thank my hon. Friend for his continued pressure on us to take more account of poverty. The Government are pursuing that at every opportunity. With the World Bank and the IMF, we have made sure that they have formed new joint working partnerships to flesh out the new poverty reduction strategies and to ensure that their focus is alleviating poverty in the affected countries.

Sir Sydney Chapman: The Minister will recall the Chancellor proudly proclaiming at the Labour party conference that he would cancel third-world debt. Can she confirm whether that means 100 per cent. guaranteed cancellation or cancellation of only the debt accrued before the Paris Club decided to reschedule the debt of a particular country? If it means the latter, as many of us suspect, will she also confirm that, in some cases, only 40 per cent. of debt—and, for Uganda, only debt accrued up to 1981—would be cancelled?

Miss Johnson: The Chancellor said on 30 September that the UK is prepared, on a case-by-case basis, to go further than 90 per cent.—and possibly up to 100 per cent., if necessary—when debt relief would finance poverty relief—[Interruption.] For each individual country. The point of the figures that the hon. Gentleman mentioned is that we are writing off two thirds of the debt of the poorest countries under the definitions of the HIPC initiative. The Government are committed to that and a great deal of progress is being made in achieving those goals.

Mr. Roy Beggs: Since the Cologne summit, what conditions have been imposed and what monitoring has been done to ensure that those countries that benefit from debt relief are applying more resources to education and health care?

Miss Johnson: We have, as I said, made sure that there is a focus on poverty and that we address health issues. We expect a number of countries to be able to benefit shortly from the enhanced HIPC 2 programme and hope that Uganda, Mozambique, Bolivia and Mauritania will all be ready to do so soon. On 8 December, Honduras met the IMF board to open discussions on the process. There is much greater focus throughout on the programmes that the hon. Gentleman and I both want in place.

Mr. Nigel Beard: Does my hon. Friend consider the powers and policy of the IMF adequate to help countries in financial crisis? Will she comment in particular on the recent statement by Mr. Larry Summers, the United States Treasury Secretary, that the IMF should confine itself to short-term loans and leave long-term loans to the private sector?

Miss Johnson: We have continued to press for greater transparency in matters with which the IMF deals. We support in particular Larry Summers's comments in relation to considering the establishment of a fundamentally new framework for the international


community's efforts to combat poverty that will give the World Bank the lead and the IMF a more tightly focused role. We also believe, as he does, that, although macro-economic stability is necessary, it may be far from sufficient to create lasting and inclusive growth. There is a commitment to transparency, and we believe that there is no reason why the IMF's operational budget, for example, should not be published regularly. He and the UK Government share views on those moves and are looking to what would be the right future for the IMF.

Taxation

Mr. James Clappison: What was the proportion of gross domestic product represented by net taxes and social security contributions on (a) 1 May 1997 and (b) the latest date for which information is available. [101770]

Mr. Philip Hammond: In which quarters since May 1997 the percentage of GDP taken by the Government in tax over the previous 12 months has risen. [101774]

Mr. Graham Brady: In which quarters the percentage of gross domestic product taken by the Government in tax over the preceding 12 months has fallen since May 1997. [101776]

The Chief Secretary to the Treasury (Mr. Andrew Smith): Decisions on the public finances are taken on a financial year basis. Financial year figures for the tax-GDP ratio can be found in the pre-Budget report. They show that the tax-GDP ratio is lower this year than last. It will be lower in the two following years than last year. Under the previous Government's plans, those rates would have been higher than the latest projections, in this year and for the next two years.

Mr. Clappison: As the Minister is unable to provide the figures that were specifically requested in my question, may I put this to him? Will he simply say whether the tax burden is greater or lesser than when the Government came to office?

Mr. Smith: The pre-Budget report shows—[HON. MEMBERS: "Answer."] The hon. Gentleman asked for figures. The pre-Budget report shows that the share of GDP going on tax this year is 37 per cent. Last year, it was 37.4 per cent; for next year the projection is 36.8 per cent. That shows a tax burden that is falling, not going up.

Mr. Hammond: As the right hon. Gentleman seems to be having some difficulty, let us deal with the matter in multiple-choice terms. Does he agree with the Chancellor, who said on Tuesday that the tax burden was increasing, or with the Prime Minister, who said on 24 November—this can be found in column 609 of Hansard—that it was decreasing?

Mr. Smith: My right hon. Friend the Chancellor did not say that the tax burden was increasing, because it is not increasing. I shall give the hon. Gentleman the figures again. They are 37.4 per cent. for last year, 37 per cent. for this year and 36.8 per cent. for next year. That is a tax burden that is decreasing, not increasing. Moreover, it is

smaller this year, and will be smaller next year and the year after, than it would have been under the Conservatives.

Mr. Brady: The Chief Secretary really ought to come clean. The Chancellor made it clear on Tuesday that, since the Government had taken office, the tax burden had become larger than it was in 1997. Does the Chief Secretary agree with that? Will he now make it clear that it is the case?

Mr. Smith: I will take no lectures on coming clean from Opposition Members who broke the promises that they had made about tax when they were in government. We are keeping each and every promise that we made about tax at the election.

Mr. Dale Campbell-Savours: I had a very interesting meeting with some business men last week. They told me—[Interruption.] The Tories would do well to listen. They told me that they wanted the tax burden to increase. [Laughter.] Yes, and they are telling the Tories the same. They say that that would reduce demand, and would take the pressure off interest rates. Is that not an interesting case which business men are now making?

Mr. Smith: I am sorry to disappoint my hon. Friend, but I cannot assure him—or, through him, the business people to whom he has been talking—that the tax burden is increasing. I have already given the House the figures, which show that the tax burden is decreasing.
I should have expected those business people to welcome particularly the cuts that we have made in corporation tax, which mean that our rate is the lowest in the industrialised world.

Ms Rosie Winterton: Is my right hon. Friend aware that organisations such as the Royal Automobile Club and the Automobile Association were extremely critical of the tax burden placed on motorists by the Tory Government, who introduced the fuel duty escalator? Is he aware that those organisations have welcomed the hypothecation of future real-terms revenue increases in fuel duty? Will he ensure that there is a continuing dialogue with organisations such as the RAC, which is very supportive of the Government's choice of priorities for the purpose of spending the extra revenue?

Mr. Smith: Yes, indeed. My hon. Friend is right: the AA, the RAC and other organizations —and motorists in general—were very concerned about the continuation of the fuel duty escalator introduced by the last Government, and have welcomed my right hon. Friend the Chancellor's decision.

Mr. Owen Paterson: Why is it going up?

Mr. Smith: I am telling the House about my right hon. Friend's decision to end the escalator introduced by the hon. Gentleman's party. As my hon. Friend the Member for Doncaster, Central (Ms Winterton) said, that decision will be greatly appreciated by motoring organisations, by motorists and, indeed, by the general public, who will—


as she says—benefit from the hypothecation of revenues over and above inflation for public transport and improvements in our road network.
Yes, there will be continuing dialogue on these matters.

Mr. Geraint Davies: Does my right hon. Friend agree that the long-term tax reductions that the Government are introducing are based not just on cutting headline income tax and corporation tax, which they are doing, but on the fundamentals of lower interest rates, lower inflation rates and job security? Indeed, an extra 750,000 people are in jobs. A return to the boom and bust of the Jurassic park party opposite would simply inflict an extra 22 Tory taxes on the British people.

Mr. Smith: Yes indeed. The sensible and sound policies that we are following on fiscal matters complement our decisions to put a sound monetary framework in place and our measures to raise productivity, to equip our country with skills and to ensure that we are more competitive in future. My hon. Friend is right. The contrast could not be clearer than that between the Conservative party, which imposed 22 tax rises and broke its promises to the British people, and the Labour party, which has kept and is keeping each and every tax promise that it made on tax, as on everything else.

Mr. Francis Maude: It is scarcely credible that, even after the Chancellor admitted on Tuesday that the tax burden has risen since Labour came into office, the Chief Secretary is still arguing the toss. I remind him that the Government's own figures show that the tax burden was at 35.6 per cent. when they took office. It has gone up in every single quarter since then and is 37.7 per cent. now. Where does that leave the Prime Minister's pre-election promise that Labour had
"no plans to increase taxes at all"?
Does he agree with the Prime Minister's official spokesman, who is quoted in today's press as saying that getting at the truth on the tax burden is just a "game"?

Mr. Smith: I am sorry, but the right hon. Gentleman has missed again. My right hon. Friend the Chancellor did not say that the tax burden was rising; he said that it was falling. He said that because it is.
The right hon. Gentleman refers to promises made before the general election. I will tell him and the House what we promised. We promised not to raise the basic or top rates of income tax throughout the next Parliament and we have not. We said that our objective was a lower starting rate of income tax of 10p in the pound, a promise kept; we have delivered it.
We said that we would cut VAT on fuel to 5 per cent. when Conservative Members wanted to make it higher. We kept that promise and cut VAT on fuel. We said that we would not extend VAT to fuel, children's clothes, books, newspapers and public transport. We have not and we will not. We said that the welfare to work programme would be funded by a windfall levy on the excess profits of the privatised utilities. It was much derided and opposed by Conservative Members, but that is the policy that has delivered the new deal and cut youth unemployment by more than 60 per cent. and long-term

unemployment by 50 per cent. The contrast could not be clearer between the party that keeps its promises on tax and the party that broke its promises.

Mr. Maude: The Chief Secretary still does not get it. The Prime Minister said before the election:
We have no plans to increase taxes at all.
Was that a promise? What does the Chief Secretary understand that to have meant? The fact is that Labour got elected by promising not to increase taxes at all. Once elected, almost the first thing it did was to raise taxes massively by stealth. In every quarter since the election, the tax burden has increased. Ministers do not just deny it; they claim the opposite—that taxes are falling. Now that the Chancellor has finally admitted that the tax burden is remorselessly rising, what does he say? He says that Labour did not make that promise in the first place. When will we eventually see the end to the great Labour lie on tax?

Mr. Smith: I can only repeat: the Chancellor did not say that the tax burden is increasing because it is not. It is going down. I can give the figures again: 37.4 per cent. last year, 37 per cent. this year, 36.8 per cent. next year. More importantly for families and the taxes that they are paying, as a consequence of our tax changes, the average household is £380 a year better off and families with children are £740 a year better off—benefits which the Conservative party would clearly take away from them.

Mr. Roger Casale: Does my right hon. Friend agree that Labour Members have no lessons to learn from Conservative Members when it comes to setting tax levels? We keep our promises—on introducing the working families tax credit, lowering the starting tax rate by 1 p, and introducing the 10p tax rate—whereas, in office, Conservative Members broke their promises, raising tax not once, not twice, but 22 times.

Mr. Smith: Yes. The electorate will no more forget those 22 Tory tax rises than they will the boom and bust that went with them and that inflicted such incalculable damage on our economy.

Mr. Matthew Taylor: The Prime Minister yesterday admitted that, to overcome the Conservative deficit that the Government had inherited, tax had been increased in the their first two years in office, and promised that taxes would start to decrease. Does the Minister feel entirely comfortable with cutting 1p off income tax next year, even though the Secretary of State for Health has had to abandon waiting list targets, and out-patient waiting lists have not only doubled but, on current spending plans, are set to increase further?

Mr. Smith: Very comfortable—because it is absolutely in line with the promises that we made at the general election and not least because we are investing £21 billion extra in health.

Mr. David Chaytor: Does not the obsession with the overall tax take conceal the very


important matter of tax distribution? Is it not indisputable that, since 1997, hundreds of thousands of low-income families have been taken out of the tax bracket entirely?

Mr. Smith: Yes, indeed. Furthermore, 1.4 million households are benefiting, by an average £24 a week, from the working families tax credit—which is a real advantage and a tax cut that Conservative Members would remove from them.

Land Settlement Tenants (Compensation)

Mr. Laurence Robertson: What plans he has to meet the chairman of the Inland Revenue and hon. Members to discuss tax issues relating to compensation given to former land settlement tenants. [101771]

The Paymaster General (Dawn Primarolo): There are no plans for such a meeting. Representations have been made querying the raising of tax charges by the Inland Revenue in respect of an out-of-court compensation paid by the Ministry of Agriculture, Fisheries and Food, in the early 1990s, to a number of former tenants of the Land Settlement Association, but it has been made clear that Ministers do not intervene in individual cases. The Inland Revenue's independence from Treasury Ministers in handling individuals' tax affairs must be scrupulously observed. When disputes continue between taxpayers and the Revenue, it is for the appeal commissioners and the courts to determine how the law is to be applied.

Mr. Robertson: I thank the Minister for that reply. At some stage, however, Ministers have been involved in the matter. Although the Minister quite rightly said that the award was made by MAFF in the early 1990s, the then Minister said in a letter to the chairman of the Inland Revenue that
"it was quite clearly Ministers' intention at the time of the settlement that the out-of-court payments were intended to compensate the ex-tenants of the LSA for personal hardship … it was not therefore intended as taxable compensation for loss of earnings".
I really do think that the Minister should get involved in resolving what is clearly a gross inequity.

Dawn Primarolo: The rules applying to the Land Settlement Association are the same as those applying to all other taxpayers; an exception would be possible only if a specific amendment were in a Finance Bill or if an extra-statutory concession were publicly announced. Such an exception may be authorised only by a Treasury Minister, and Treasury Ministers in the previous Government made no such authorisation. Ministers in the previous Government did not put in place the rules that the hon. Gentleman claims that they should have. Consequently, normal taxpayer rules apply.

Mr. Howard Flight: The House will be aware—as I am sure that you are in the west midlands, Madam Speaker—that many land settlement tenants have retired or are farmers. The Government have hardly been helpful to those two categories of people—indeed, one might argue that those people have been victimised. By refusing to support the intent of the previous Government, are not the current Government imposing yet another stealth tax on two

categories of people whom they have already hit hard? Secondly, will the Minister not admit, as the Chancellor has already admitted, that the overall burden of taxation has gone up from 35.3 per cent. of gross national product in the tax year 1996–97 to more than 37 per cent. this year, and that that is a marked rise in taxation?

Dawn Primarolo: The hon. Gentleman fails to understand how the tax system works. It was not the intent of the previous Government to make such an arrangement. Had it been their intent, they would either have tabled a specific amendment to a Finance Bill—they did not; the issue was settled in the early 1990s—or put in place an extra-statutory concession to give influence to that compensation. The hon. Gentleman is asking us to breach the principle and require Ministers to get involved in individual taxpayers' affairs. Relations in the tax system are clear. An appeal must go to the appeal commissioners and then to the courts. That is the position over which the previous Government presided and it would be foolish to require Ministers to intervene inindividual matters now. Some individuals have settled. Others continue to argue hardship. The proper way forward is for them to appeal to the appeal commissioners and then, if they are not satisfied, to the courts.

Mr. Phil Woolas: In the light of the questions that she has been asked today, which does my hon. Friend think is falling faster—the tax burden or the reputation of the right hon. Member for Horsham (Mr. Maude)?

Madam Speaker: Order. That was rather a wasted question.

Sir Nicholas Lyell: Will the Minister reconsider what she has just said about the former tenants of the Land Settlement Association? We are talking about people who endured pain, suffering and hardship for years. Compensation for that is not taxable. Will she recognise that such poor people have no money to go to the special commissioners or through the Court of Appeal? Before they are driven down that route, there should be a meeting with the head of the Inland Revenue. The Minister should kindly read the question that she is answering, which refers not just to Ministers, but to the head of the Inland Revenue. Such a meeting would enable Members on both sides of the House who represent those poor people to help them find a fair way through their harsh and unfair situation and solve the problem before they are driven to court, adding to the burdens of those whose suffering we should be sympathising with rather than increasing.

Dawn Primarolo: I am surprised by the right hon. and learned Gentleman's heavy criticism of the actions of his colleagues when they were in power, because they decided not to make specific arrangements. As he knows, compensation for personal hardship is not liable to income tax. Compensation for loss of trading profits is taxable as a trading income. That was established when the compensation was paid by the previous Government, whose Treasury Ministers failed to make any legal provision of the type for which they are now arguing, to change the calculation of tax on compensation. They now


ask for a Treasury Minister to intervene in individual tax affairs. That should not and cannot happen. The appeal system is clear in legislation.

Exchange Rate

Dr. Vincent Cable: What his definition is of a competitive sterling exchange rate; and if the United Kingdom currently meets that definition. [101775]

The Financial Secretary to the Treasury (Mr. Stephen Timms): The Government do not have a target exchange rate for sterling. By pursuing policies for sound public finances, sustained growth and low inflation, the Government are creating the environment for achieving and maintaining a stable and competitive exchange rate over the medium term.

Dr. Cable: How do the Government reconcile their commitment to a stable and competitive exchange rate with the Organisation for Economic Co-operation and Development data which came to the House of Commons Library yesterday, which show that the price competitiveness of British industry, and exporters generally, has declined by 6 per cent. this year; 12 per cent. since the Government came to office; and 30 per cent. since the beginning of 1996? Is the objective simply not attainable, and would it not be more honest for the Government to acknowledge that they are not even proceeding in the right direction?

Mr. Timms: We have achieved a remarkable new stability in the economy since the election. The imperative now is to lock that in for the long term, and to build on it to deliver full employment for Britain in the new millennium. I recognise that there are real concerns, particularly for manufacturers selling their goods in Europe, but short-term fixes are not the answer. The pick-up in world growth is improving UK export performance. The latest three-month on three-month data show that goods export volumes, excluding oil and erratics, are up strongly by 8 per cent. to September. Services exports remain close to record high levels, and manufacturing output is up. In reality, the news on exports is encouraging.

Mr. Alan W. Williams: The totally unexpected fall in the value of the euro in the past year has driven the pound up to record levels. The European Union, as a trading bloc, has a massive balance of payments surplus, inflation is barely 1 per cent. and unemployment is at 10 per cent. What pressure are the Government putting on our European partners to expand their economies so that the euro recovers and the pound can then fall in value?

Mr. Timms: That is a matter for them, but I entirely recognise that there are firms —particularly those selling goods in Europe—which are facing real difficulties. However, there is no quick fix here. The consensus among independent forecasters is that exports of goods and

services will grow by 4 per cent. next year. Exporters are performing well, and CBI data on export orders show clear improvements on a year ago.

Mr. Eric Forth: Does the Minister accept the vital role that has been played by variable exchange rates in recent economic history? Does he recognise that most of the successful economies of the past few decades have succeeded because of the fact that they were benefiting from their currencies' variable exchange rate? Does he further accept that a variable exchange rate is a vital mechanism to recognise changing relationships between trading economies, and that, were that variable relationship not to be available, other things would have to vary domestically—not least inflation and unemployment?

Mr. Timms: Medium and long-term exchange rate stability is desirable, and requires the approach that we are taking—sound macro—economic policies for sustained growth and low inflation. We will not repeat the mistakes of the past with short-term fixes, which would take us back to Tory boom and bust. We are taking the right decisions for the long term to build for a future of full employment.

Mr. John Swinney: Apart from telling them that there are no short-term fixes, does the Minister have any other advice for exporters who are wrestling with a competitive disadvantage of 20 or 30 per cent. in relation to previous years? Is it not the case that the improvement in manufactured exports has come about only because it is an improvement on pretty awful figures—figures which declined because of the impact of sterling over the past two to three years?

Mr. Timms: The hon. Gentleman is right—things are improving. However, I repeat that I recognise the difficulties that some exporters are facing. The Government attach great importance to the promotion of exports. That is why we established British Trade International in May, giving Britain a sharper edge in export markets. We want to work with exporters to maximise their success in overseas export markets.

Alcohol Smuggling

Mr. Eric Illsley: What proposals he has to combat the smuggling of alcohol into the United Kingdom. [101777]

The Paymaster General (Dawn Primarolo): The comprehensive spending review allocated customs an additional £35 million to tackle evasion of excise duties, enabling it to deploy 145 additional staff. Currently, another 55 officers have been redeployed to the south-east to tackle the seasonal peak in excise smuggling.
There has been a steady increase in the number of staff deployed on this work. At the beginning of this financial year, Customs had about 1,000 staff employed in combating excise smuggling. In addition, my right hon. Friend the Chancellor announced in his pre-Budget


statement additional funding for customs to deploy a national network of X-ray scanners designed to detect smuggling in freight.

Mr. Illsley: I welcome that reply, but is my hon. Friend aware that in my constituency and the whole of the north of England, smuggling and illegal sales of alcohol are on the increase and are destabilising many legitimate traders? Will she consider the reintroduction of the wholesale liquor licence, which I understand was done away with in the early 1980s, to help to prevent illegal traders from selling contraband booze? Will she also reconsider the rates of duty on alcohol, and especially beer, and try to bring them more in line with those on the continent?

Dawn Primarolo: Customs has deployed 130 extra officers inland, away from the frontiers, to disrupt the illegal distribution networks. The Government have also increased the penalties for those caught dealing in these illegal goods. We have an agreement with Camelot, for example, that a trader who is convicted of trading in illegal goods would lose the licence to sell lottery tickets. In the pre-Budget report, my right hon. Friend the Chancellor announced that we are considering the use of tax stamps to identify legitimate products, so that those who trade in products not bearing the stamp can be prosecuted.

Mr. Nicholas Soames: I am delighted to hear of the new measures and the extra manpower that Customs and Excise has been able to deploy. That is good news. Does the Paymaster General agree, however, that the news is still very bad and that an enormous amount of illegal goods is getting through? Will she assure the House that Customs and Excise will prosecute whenever it has evidence, to ensure that people understand that the illegal trading is not just a fly job but a serious matter that is deeply destabilising to many firms in the south-east, which are under great pressure as a result of this wholly illegal activity?

Dawn Primarolo: Yes, I am happy to confirm that Customs and Excise will prosecute when we catch people dealing in these illegal goods. There are considerably more staff available for tackling the problem than there would have been under a Conservative Government: on election in 1997, we found that the Conservative Government had planned in their fundamental expenditure review to reduce by 300 the anti-smuggling staff. We kept those officers in place and have deployed them to do exactly the work that the hon. Gentleman implores us to do. He is quite right: the illegal selling undermines the legitimate trade and undermines our communities because of the criminal activity. We will continue to deal with the problem and to prosecute the offenders.

Growth Forecasting

Mr. David Kidney: What assessment he has made of his Department's accuracy in forecasting United Kingdom growth since 1997. [101778]

The Economic Secretary to the Treasury (Miss Melanie Johnson): Recent forecasts have been very accurate compared with those in the past. We have been helped by the National Audit Office audit of key assumptions, and the Government are ensuring that fiscal plans are set on a sound and prudent basis.

Mr. Kidney: Does my hon. Friend recall how many forecasters, including the Opposition, scoffed at the Treasury's forecast in this year's Budget of growth of 1 to 1.5 per cent? They said that the forecast was unrealistically high, but it has now been completely vindicated. How does my hon. Friend explain the Treasury's forecasting success when so many people have egg on their faces?

Miss Johnson: As my hon. Friend says, the Treasury's success is rightly to be contrasted with that of the right hon. Member for Horsham (Mr. Maude), the shadow Chancellor of the Exchequer, who said of my right hon. Friend the Chancellor at the time that we made those forecasts:
Until he wakes up to the worrying economic prospects facing Britain, he will never be able to get to grips with the situation.
A couple of days later, the right hon. Gentleman said in his press release:
The economy is heading for a far sharper slowdown than the Government is complacently predicting.
Is it any wonder, given that the Treasury got it right and the Opposition—as usual—got it wrong, that no one believes a word that the right hon. Member for Horsham says?

Mr. Edward Davey: In the economic forecasts for United Kingdom growth, is not the Treasury now deliberately underestimating growth in years two and three in the pre-Budget report to massage the public finances and to hide a huge Budget surplus in future years? Are not the Government amassing a huge election war chest? Will the Minister tell the Chancellor when he returns from the G20 that there is no point in being an iron Chancellor if he leaves our public services to rust?

Miss Johnson: The hon. Gentleman is wrong. We have shown the prudence that the previous Government should have shown when they looked at a brief moment and decided to make economic decisions that led us into boom and bust in the 1980s. They should have looked to the longer term, and that is what this Government are doing. We have made prudent assumptions and we are sticking to them. I will take no lectures from the Liberal Democrats on forecasting because they have spent 1p so many times that most of us have lost count.

Mr. Quentin Davies: How can the Government possibly hope to forecast anything accurately when they are in denial about what is happening now? We heard from the Chief Secretary earlier more of this eyewash about the tax burden falling, but the figures—I have them here from the Library—show that, in every single quarter from 1997 to the second quarter of 1999, which is the last quarter for which figures are available, the tax burden has increased. Let me throw


the figures to him now across the Dispatch Box so that he will not be able to continue to deny the facts. Can we please have an answer to the question?

Miss Johnson: The hon. Gentleman has, as usual, got it completely wrong. The figures are as my right hon. Friend the Chief Secretary said. [Interruption.] I am grateful to the hon. Gentleman for passing the figures across the Dispatch Box—[Interruption.] I do not need to pass across the key figures that Opposition need to reflect on, because they are their predicted tax rises for 19992002. [Interruption.]

Madam Speaker: Order, Mr. Paterson.

Miss Johnson: The Conservatives' figures for all three years show that there would have been a higher tax burden under a Conservative Government than there will be under Labour. As with everything else, the country is better off with a Labour Government.

Economic and Monetary Union

Mr. Ben Chapman: If he will make a statement on progress on implementation of the national changeover plan. [101779]

The Economic Secretary to the Treasury (Miss Melanie Johnson): Progress on the national changeover planning project was reported in the Treasury's third report on euro preparations on 1 November. Copies of the report are available in the Library.

Mr. Chapman: Is not the implementation of the national changeover plan the only sensible way to proceed? What individual or organisation—in the private or public sector—would proceed with the prospect of a decision when the conditions are satisfied without making adequate preparations? Does my hon. Friend not agree that the position of the Conservative party is entirely incomprehensible in that respect? Will she also tell me when the second implementation plan might be published?

Miss Johnson: I am grateful to my hon. Friend for making exactly the right points on this matter. We need to take a lead in making preparations so that we are able to decide one way or another. We have consulted more than 100 organisations. The public sector has taken a lead in the preparations and, this month, the Bank of England issued a document on its work in this regard. We also now have the opportunity in our preparations to consider the experience of first-wave countries.

ECHR Judgment (Thompson and Venables)

The Secretary of State for the Home Departmente (Mr. Jack Straw): I should like to make a statement about the decision of the European Court of Human Rights, which announced its judgment this morning. in the case brought against the United Kingdom Government by Robert Thompson and Jon Venables. A copy of the judgment has been placed in the Library.
Those two youths were responsible for the appalling murder of James Bulger in Liverpool in February 1993. The whole House and the country have the deepest sympathy for James's parents. As Lord Reed, one of the court's judges, said in this judgment:
the grief of James Bulgers' parents, who took part in the proceedings before the Court, is inexpressible.
He added that the fact that those responsible
were themselves only ten years old at the time of the murder makes it particularly disturbing".
The authority of the European Court of Human Rights derives from our membership of the Council of Europe. The Council of Europe was established after the war on the initiative of the allies, especially the United Kingdom. It now has 41 nations in membership. The Council predates the European Union, and is wholly separate from it.
The European convention on human rights is a convention of the Council of Europe and the Court of Human Rights, which sits in Strasbourg, is one of its principal institutions. British jurists played a leading role in drafting the convention and the UK was the first nation to ratify it in 1951. Successive UK Governments have, ever since and consistently, abided by the decisions of the court, introducing amending legislation in this Parliament where necessary.
In the case that Robert Thompson and Jon Venables brought before the Strasbourg court, the two youths essentially argued that facing trial in a Crown court and having their tariff set by the Home Secretary were inappropriate given their ages. They claimed that those arrangements breached articles 3, 5, 6 and 14 of the convention relating to powers of detention and the right to a fair trial. The youths were 11 at the time of conviction and they are now aged 17.
The House will understand that I have had only a short time to read the judgment, which was not issued to the public or to Ministers until early this morning. However, the key findings are as follows.
First, there were no violations of the European convention on human rights in respect of article 3 and, in one regard, in respect of article 5(1). Article 3 is on the right not to be subjected to inhuman and degrading treatment or punishment and it relates to matters of both trial and of sentence. In particular, the court held as lawful the age of 10 as the age of criminal responsibility in England and Wales. It was also of the view that the particular features of the trial process did not cause,
to a significant degree, suffering going beyond that which would inevitably have been engendered by any attempt by the authorities to deal with the applicant".
The court also held that there had been no violation in respect of article 5(1), the right to liberty. It held that the sentence of detention at Her Majesty's pleasure was

clearly lawful under English law and was not arbitrary. However, the court did find violations in respect of article 6(1), the right to a fair trial, and, under articles 6(1) and 5(4), relating to the setting of the tariffs and their continued review.
On article 6(1), the right to a fair trial, the court found that, notwithstanding the special arrangements made to help ensure that the youths could properly participate in the trial process in the Crown Court,
it was highly unlikely that either applicant would have felt sufficiently uninhibited, in the tense court room and under public scrutiny, to have consulted with their legal representatives during the trial or, indeed, that, given their immaturity and disturbed emotional state, they would have been capable outside the court room of co-operating with their lawyers and giving them information for the purpose of their defence".
It therefore followed, in the view of the court, that the applicants had been denied a fair hearing in breach of article 6(1).
On the setting of tariffs and their continued review, the court first held that there was a fundamental distinction between the sentence for murder in respect of juveniles and that for murder in respect of adults. As far as the latter—the sentence for adults—was concerned, the European Court, in an earlier judgment on the 1994 Wynne case, had accepted the lawfulness of the mandatory life sentence for adults convicted of murder. It had also accepted as lawful the arrangements for tariff-setting by the Secretary of State.
Today's judgment does not deal with the arrangements for adults who have been, or will be, convicted of murder in the courts in England and Wales. However, in this case, which involves juveniles, the European Court followed a decision by the House of Lords' Appellate Committee of the Privy Council that the setting of the tariffs for juveniles was itself a sentencing exercise. The court added that, as the Home Secretary—who set the applicants' tariffs—was clearly not independent of the Executive, there had been a breach of article 6(1) in respect of the determination of the applicants' tariffs.
On article 5(4), the court held that, because the applicants' tariffs had been decided by the Home Secretary, there had been no judicial supervision incorporated in the initial fixing of their sentences. The court therefore found a violation of article 5(4) based on the lack of any opportunity for the applicants to have the lawfulness of their detention assessed by a judicial body.
In summary, therefore, the court has found in favour of the United Kingdom Government on two important issues—that Robert Thompson and Jon Venables were never subjected to inhumane or degrading treatment by the Government, and that the sentences imposed by the court were not inconsistent with the requirements of the convention. However, it has found against the United Kingdom on issues relating to the trial process, to the way in which the tariff linked to their sentence was set, and to the failure subsequently to review the tariff.
The judgment does not overturn the verdict of murder in this case, nor does it in any way exonerate the two youths for their part in this terrible crime. The judgment does not direct their release from custody. The parole board remains responsible for deciding release in these cases.
As with any such decision of the court, the Government accept its judgment. However, the full judgment runs to 120 pages, and the House will understand that I need to


study carefully the detail of what the court has said, and fully to consider the implications. I will of course report the outcome of my considerations to Parliament as soon as possible, and it will be for Parliament to agree any change that may appear to be required in the legislative framework for dealing with juvenile offenders in these circumstances.
The appalling murder of James Bulger—a two-year-old murdered by two 10-year-olds—profoundly shocked this country and continues to do so, but the real agony is felt by James's parents. It is they who have endured, and will continue to endure, the profound grief of losing their son—a fact which nothing can ever repair.

Miss Ann Widdecombe: I thank the Home Secretary for his statement and for his courtesy in giving me an early sight of it. Of course I accept that he is studying the judgment. Indeed, I would have been the first to criticise had he come to this House with ready-made decisions without studying it in more depth. Nevertheless, I will ask him to indicate his thinking on one or two matters that have been the subject of much public discussion.
Does the Home Secretary agree that a tariff must reflect what is appropriate to the crime itself, rather than take into account the various stages at which the nature of imprisonment changes? He will be aware that there has been considerable discussion about whether it is right for Thompson and Venables to enter the adult system. Does he agree that that is not germane to setting a tariff, but that a tariff must reflect the gravity and nature of the crime, rather than any consideration about the nature of the imprisonment involved?
Does the Home Secretary agree, from his knowledge of tariffs, that, had these two been adults, the tariff would probably have been in the region of 25 years and that, therefore, an appropriate and, indeed, sizeable discount was given to reflect their youth? Does he agree also that that tariff is roughly comparable to that involved in the only other roughly comparable crime committed by a child of similar age, and that the tariff of 15 years is not vastly in excess of the time served by Mary Bell, who also transferred to the adult system during the course of her imprisonment?
Will the Home Secretary confirm that it is the case that, in July 1996, our Court of Appeal upheld the Home Secretary's right to adopt the same policy for setting tariffs for young offenders as for adults, and that decision gave legitimacy to the practice? Furthermore, does he recognise that the power to increase tariffs has been used hundreds of times without challenge?
Naturally, I accept that the Home Secretary is studying the judgment. Is he in any position to indicate, even in a preliminary fashion, what options might be available? For example, does he feel absolutely compelled to change the nature of the Home Secretary's role? He has observed—the House will be grateful for this—that the judgment does not affect the verdict. Does he agree, and can he say whether, even had the trial been conducted under the juvenile rather than the adult system, it is most unlikely that anything would have happened other than that Thompson and Venables would still have been convicted and sentenced to detention at Her Majesty's pleasure?
Does the Home Secretary agree that it is in the interests not only of James Bulger's parents and the surviving relatives but of Thompson and Venables themselves that

they settle down to complete their sentence without the regular glare of publicity that this case involves, and that being encouraged to look upon themselves as victims of the system rather than perpetrators of a serious crime will not help them come to terms with what they have done and to lead law-abiding lives thereafter?
Conservative Members join absolutely with the Home Secretary in renewing our sympathy for James Bulger's parents and other members of his family and expressing the horror which we all felt at that crime, at the vulnerability of the victim, and at the shockingly young age of the perpetrators. I thank him again for his statement and should be grateful for as much elucidation as he can give on the points that I have raised.

Mr. Straw: In turn, I am grateful to the right hon. Lady for the way in which she put those questions. She asked a number of specific questions about the setting, or resetting, of tariffs in these cases. I crave the indulgence of the right hon. Lady and the House if I do not go down that road. These matters require the most careful consideration; I do not believe that it would be appropriate to offer views on them, given that, like everyone else, I have only had the judgment for about three hours.
It is important for the House and the country to understand that setting a tariff sets the minimum sentence which someone convicted of these grave crimes can serve for retribution and deterrence. It is only at the end of the serving of a tariff that the issue of release arises. Then, an assessment of risk is made as to whether it is safe to release the individual, whether it is an adult convicted of murder or someone who is serving a sentence at Her Majesty's pleasure—typically, a juvenile. The assessment of, and final decision on, adult murderers is made by the Home Secretary of the day, but the decision about those detained at Her Majesty's pleasure is, as a result of a separate decision of the European Court of Human Rights, made by the parole board. However, many people convicted of murder—both adults and juveniles—serve a sentence significantly beyond their tariff because the Home Secretary of the day or the parole board judge that it is not safe to release them any earlier.
I have read the judgment as carefully as possible, as I previously read the preliminary decision of the European Commission of Human Rights. It is important to appreciate that the issue is not the guilt or innocence of the two youths—it relates instead to the circumstances in which the trial had taken place, the setting of tariffs and the allegation that there had been insufficient judicial supervision of the sentence post-tariff but before its expiry.

Mr. Kevin McNamara: This was a terrible crime, and our sympathies go to the family of James Bulger, particularly his parents. Can my right hon. Friend clear up some of my confusion? If the European Court has accepted that a fair trial was denied, under article 6(1), how does the verdict stand? The trial was either fair or it was not. Can my right hon. Friend explain that contradiction, now or later?

Mr. Straw: I am afraid that the matter is not as simple as that. Our domestic courts may decide that an error had been made in the process of a trial but that it was not such as to require a guilty verdict to be overturned. I ask my hon. Friend the Member for Hull, North (Mr. McNamara) to look in detail at the judgment.
As I have already made clear, the European Court of Human Rights found in favour of the United Kingdom Government in two respects. One was with regard to a claim by the applicants that aspects of the trial process relating to the age of criminal responsibility breached their rights under article 3 not to be subject to inhuman and degrading treatment or punishment. The Court also found in favour of the United Kingdom in respect of the applicants' rights to liberty under article 5. It was in respect of aspects of article 6(1), on the right to a fair trial, and article 5, on the detention of anyone in Council of Europe countries, that the court held that there had been a violation. The court did not say, therefore, in the sense in which it is understood in common parlance in the UK, that the trial at Preston Crown court was defective and that the verdict should be overturned. That was never at issue.

Mr. Simon Hughes: I thank the Home Secretary for his prompt, accurate, considered and welcome statement. I join him and the right hon. Member for Maidstone and The Weald (Miss Widdecombe) in saying to the family of James Bulger that the House and the country remain supportive and sympathetic. We share their belief that, when young people commit terrible crimes, they should be properly punished.
It is an instructive point of the decision that the family of the victim were represented before the hearing in the European court. Will the Home Secretary consider how we can better ensure that victims who survive or the families of victims who do not can be represented in the processes that precede decision and sentence? One of the great complaints about our system is that great attention is given to hearing the defendants, while little is given to hearing the views of those who have been victims or who have suffered bereavement, as in this terrible case.
I should make just three further points. Does the Home Secretary agree that the case does not for one moment suggest that, simply because we require fair trials for children—even if differently fair from those for adults—we should not have appropriate and severe sentences for children, just as we should for adults who offend?
Like me, the Home Secretary has had only a short while to consider the judgment, but will he reflect on the key element of the decision that we should move away from political decisions on sentencing to judicial decisions? We must all welcome that. Means exist for dealing with lenient or excessive sentences, but they should be judicial means, free of political interference. That does not necessarily mean less severe or shorter sentences, but it must mean sentences beyond a political context that might be affected by the pressure of the moment.
The Home Secretary should feel vindicated by what the case makes clear about his decision, which we strongly supported, to incorporate the European convention on human rights into British law in the Human Rights Act 1998—due to take effect next year. That decision will mean that, from next year, decisions taken in the UK will not be pronounced on from over there in Europe. Our courts will be able to take decisions on the basis of British and European human rights law. That will produce more

immediate verdicts, and verdicts more likely to be right first time, rather than prolonging the terrible trauma of those who suffer from court cases such as the Bulger case.

Mr. Straw: I am grateful for the manner of the hon. Gentleman's remarks. It was extremely important to the family that they were represented at Strasbourg. I entirely accept that we must do a great deal more to ensure that the victims or, in the case of murder, their families, are able to play a more dignified role in our court process. Previous Governments considered that, and we are thinking further about it. Already, there have been developments in victims' statements. I meet many relatives of victims of murder. Anyone who has met such people knows how harrowing that experience is. One of their main complaints is that they feel as if they are spectators—at best—in the court process. They do not ask to take over prosecution, recognising that that is a proper role for the state. However, we must examine our procedures and the experiences of some other countries to see whether families could play a better and more dignified role.
The hon. Gentleman suggests that, under the current system, setting tariffs and determining release are political decisions. I do not think that that is the appropriate adjective to attach to our system. I do not want to speak about the arrangements for tariff-setting in respect of juveniles, as that is a matter which I have to consider in the light of the judgment of the European Court in Strasbourg, but the arrangements for setting the tariff and for release in respect of adults have been taken seriously by successive Home Secretaries, who have sought to exercise their judgment in a quasi-judicial way.
I can speak only personally, but I believe that I speak on behalf of others who have held this office. In every case where we are faced with such difficult decisions, we must consider the matter in a quasi-judicial way, first because that is right, and secondly because such decisions are, rightly, the subject of intense scrutiny and supervision by the courts through the process of judicial review. Moreover, the reasons that led us to make those decisions are the subject of full disclosure.
The hon. Gentleman's final point related to the incorporation of the European convention on human rights into our domestic law, which will come into force on 2 October next year. I believe that that should help the United Kingdom to ensure that that convention and the jurisprudence of the court impacts on our institutions in a way that is more attuned to our law. That was one of the reasons why the noble Lord Kingsland, the shadow Lord Chancellor, speaking on behalf of the Opposition, commended the incorporation of the convention, which has become part of the Human Rights Act 1998. Although that may reduce the number of times that the UK Government are taken to the Strasbourg court, it will not eliminate that process. There will still be occasions when applicants seek to overturn judgments made by our courts or by Parliament.

Mr. Frank Doran: I thank my right hon. Friend for his statement, and align myself with the comments that he and other hon. Members have made expressing sympathy and continuing support for the Bulger family.
Inevitably, we will concentrate on that case and the criminal law aspects involved. Before I entered the House, I practised as a Scottish solicitor, and my specialism was


child care law. When I was learning my trade 25 or so years ago, I quickly learned how poorly we deal with children in all aspects of our legal system.
I am not asking for a decision today but, when my right hon. Friend, together with other relevant Ministers, considers the full implications of this case, will he see it as an opportunity for us to undertake a proper examination of the rights of children in our society, and in particular of the way in which the legal processes deal with children?

Mr. Straw: With great respect to my hon. Friend, may I decline his invitation? It is extremely important that I carefully look at the judgment and consider its implications. I am aware that some people are concerned about the way in which our courts deal with such cases. I must tell my hon. Friend, however, that dealing with children who have committed, or who are alleged to have committed, grave crimes is difficult in any jurisdiction.
There is sometimes criticism of our system for its adversarial nature and the fact that it is more public than some people would wish, yet, when I speak to my colleagues who are European Ministers of Justice and the Interior, their concerns often come from the other direction. Their systems are sometimes seen to lack public confidence because they are perceived as wholly private.
On the general issue of juvenile delinquency, it is interesting that the French Government—in the light of recent events, the House will excuse me if I mention that country—are studying with great care our system for dealing with young offenders because of considerable public concern in France that their more welfare-based system is seen to be ineffective in dealing with young criminals and in maintaining public confidence.

Mr. Michael Howard: I thank the Home Secretary for his courtesy in giving me early sight of his statement.
I once again associate myself with those who have offered sympathy to the parents of James Bulger. I also particularly associate myself with the remarks made by the Home Secretary in answer to the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) about the painstaking and conscientious nature of the tariff-setting process.
Does the Home Secretary agree that, if anyone had told those who signed the European convention on human rights in the immediate aftermath of the unspeakable horrors of the second world war that it would be applied to a case such as this, they would have reacted with utter disbelief?
Does the Home Secretary also agree that, if the judges at Strasbourg cannot resist the itch to intervene in such cases, their legitimacy will increasingly be called into question? Will the Home Secretary resume the efforts made by the previous Government to increase the margin of appreciation—that is, the extent to which member states of the Council of Europe are allowed to decide cases such as this in accordance with their own democratically accountable procedures and without outside interference?

Mr. Straw: I have to say to the right hon. and learned Gentleman that it is inappropriate in the current context for him to make what are partisan remarks even within his own party about our signature and application of the

European convention on human rights. I cannot say what was in the mind of David Maxwell Fyfe, later a Conservative Lord Chancellor, who was one of the British jurists who played such a leading role in drafting the European convention on human rights, but what was certainly in the minds of those who drafted it was that it would set out a body of European law and jurisprudence, to which member states would voluntarily agree to comply.
I have to remind the right hon. and learned Gentleman that, during the whole period that the Conservative party has been in power, not just in the previous 18 years, but in the many years before that, he and his colleagues in his party fully accepted Britain's membership of the Council of Europe and, therefore, the obligations which went with it. In the other place on 3 November 1997, the noble Lord Kingsland, the shadow Lord Chancellor, said:
on behalf of my party, I make no apologies for what is contained in that convention; we support its terms wholeheartedly."—[0fficial Report, House of Lords, 3 November 1997; Vol. 582, c. 1235.]
I would also point out to the right hon. and learned Gentleman that, during the period that he was Home Secretary, he brought proposals to the House, which were accepted, to amend our domestic law so as to make it comply with decisions of the European Court of Human Rights, as he did in the Crime (Sentences) Act 1997, following the case of Singh and Hussain, which led to the decision about the final release of those who are being detained at Her Majesty's pleasure being taken away from the Home Secretary and transferred to the parole board.
It is not just a fact of life but a central tenet of the rule of law that we are subject to the rule of law—in Britain that includes the law laid down by the European Court of Human Rights in Strasbourg, to which we have voluntarily agreed to comply. An aspect of the rule of law is that those who hold political office sometimes find that decisions may be made by judges which we may or may not happily have made ourselves, but that is an important part of the separation of powers on which our democracy is founded.

Jean Corston: I thank my right hon. Friend for his prompt statement. He is right to say that the tragedy will affect members of the Bulger family for as long they live. It traumatised a generation of parents, as any sensitive person who went shopping in the wake of the case and watched parents with their children knows. They were traumatised in the same way as my generation in the wake of the Moors murders.
As I understand it, the European Court had no difficulty with 10 as the age of criminal responsibility. That must be correct: children of 10 know the difference between right and wrong. However, the difficulty was that the mode of trial offered in the juvenile courts was not appropriate to the case, and it was therefore transferred to the Crown Court. During his deliberations, will my right hon. Friend consider the operation of the juvenile court, and make it possible to give due process to children who commit what are, hopefully, rare crimes?

Mr. Straw: I entirely associate myself with my hon. Friend's comments about the way in which this terrible case—not least, the image of that two-year-old child being led away to his death—traumatised a generation of parents more than any other event in the decade. It has
had serious consequences; children are under much greater supervision and are not allowed the freedom that our generation enjoyed to explore the areas in which we lived. All of us who are parents know the anxiety that single events—thankfully, rare events—cause parents.
The European Court was right to accept that our age of criminal responsibility is lawful. As it pointed out, the age of 10 is higher than in some other member countries, including—I add this to the judgment, which omitted it—Scotland, where the age of criminal responsibility is eight, not 10.
The court made two decisions in respect of articles 3 and 6. One was in the United Kingdom Government's favour, and the other went in the applicants' favour. They must be studied with considerable care, but they have implications for the venue and form of trial. While the juvenile courts are able to deal with less serious matters—their sentencing power is about to be increased under the Detention and Training Order so that they can give sentences of two years—we would have to think long and hard about whether that venue would be appropriate for trying grave crimes. Frankly, I doubt it. We shall have to consider alternative systems for such trials.

Mr. Douglas Hogg: Those of us who practise in the criminal court—and, indeed, society as a whole—have great difficulty with the judgment. I have recently completed a trial of a murder case in which I acted for a defendant of 16. Neither the forum nor the procedures prevented me from properly representing that young man. I ask the Home Secretary to remind everyone that the two persons whom we are discussing are undoubtedly guilty of murder. Has there been a recommendation for compensation? If so, how much? How does it equate with any payments that may have been made to the parents of the young boy who was killed?
I support my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) and ask the Home Secretary whether the language of the convention is being strained in this case. Should he not seek ways of impressing on the court that it should be wary of disturbing the practices and institutions of courts that have been established in democratic states by democratic bodies? If it goes on doing that, it will fundamentally undermine our respect for the convention and the court.

Mr. Straw: On the right hon. and learned Gentleman's first observation, I of course accept his wide experience, as someone who practises at the criminal Bar. There are significant differences between a trial in which a 16-year-old is the defendant—[Interruption.] No, we must consider this serious point as we take account of the judgment. There is a huge difference between 10-year-olds and 15 or 16-year-olds, some of whom pass for adults and are only a year from the age at which they are treated as adults for certain purposes of the criminal law under the Police and Criminal Evidence Act 1984. Indeed, only a few years ago, they were treated as adults for all purposes. This case has been made particularly difficult at all stages because the defendants were 10 when they committed the crime and 11 when they were convicted of it. I must also place it on record, as the court did, that the trial judge and everyone else made huge

efforts to ensure that, within the framework of our criminal law and process, the two defendants were able properly to understand what was going on and not gratuitously intimidated by the process.
The right hon. and learned Gentleman asked me to say whether the two youths were undoubtedly guilty of those crimes. As he knows, that was the conviction of the court. I understand that there was no appeal against that conviction at the time to the criminal division of the Court of Appeal, and it is not affected by this morning's judgment. There was no recommendation for compensation because no compensation was claimed by the applicants or their representatives. The other point that he made should be the subject of wider discussion at another time and I refer him to my answer to the right hon. and learned Member for Folkestone and Hythe (Mr. Howard). I would add, however, that I believe that, had we incorporated the European convention into our domestic law some decades ago—that was resisted by parties on both sides of the House for quite a period—we would have achieved in practice greater benefit than we have from the margin of appreciation.

Mr. Eric Forth: I echo the sentiments expressed by my right hon. and learned Friends the Members for Folkestone and Hythe (Mr. Howard) and for Sleaford and North Hykeham (Mr. Hogg). Does the Home Secretary accept that, from time to time in a mature democracy and a mature judicial system, we have the right to review what has been, and that what may have been appropriate 50 years ago may no longer be appropriate? Surely this case and others could show that it may be time to review altogether our relationship with the convention and the court. It may now be inappropriate for a body sitting in another country and far from here, and with perhaps a completely different outlook on life, to intervene—albeit with our voluntary consent up to now—in the proper, mature and accountable dealings of our judicial system, supported by our democracy.

Mr. Straw: If the right hon. Gentleman wants to think about whether we should remain members of the Council of Europe, that is a matter for him. We cannot cherry-pick our international obligations. We are members of the Council of Europe, which, in my judgment, has been a huge force for human good and has reduced the risk of world war. There were two such wars in a generation in Europe and millions of people were killed. Applicant countries that have emerged from Soviet control are having to bring their judicial systems up to the standards set by the Council of Europe as a result of international obligations imposed on them. It is because of the international rule of law, from which this country benefits, that other Council of Europe members have also had to accept the decisions of the court—and they do accept them.
I—and Her Majesty's Government—have no proposals for withdrawal from the Council of Europe and its obligations. If the right hon. Gentleman wants to pursue the issue, that is a matter for him, but this is an argument in which he must engage within his own party. When his party was in government, it supported the convention, and supported the Council of Europe. His own shadow Lord Chancellor supported the incorporation of the convention into our domestic law when the Bill that became the


Human Rights Act 1998 was going through the other place; and I remind him that, on Third Reading here, the Opposition Front Bench supported incorporation, and did not vote against it. I am pleased about that, because it demonstrated all-party support. As I explained to the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), incorporation will enable us to ensure, over time, that the court is more sensitive in regard to our domestic law and traditions. The answer is not withdrawal from the Council of Europe.

Mr. Desmond Swayne: I have no appetite for arguing with my own party, but the right hon. Gentleman is the Secretary of State responsible for this matter. Will he consider the proposition that a perfectly proper and proportionate response to this judgment, and to a number of others, would be to conclude that the Council of Europe may have outlived its usefulness as far as the United Kingdom is concerned? [Interruption.] Such a conclusion might not be welcomed by certain Members who have made a career of the Council of Europe, but it would resonate among members of the public.

Mr. Straw: I do not accept that view, and I remind the hon. Gentleman that it was never taken by the Conservative Governments whom he supported. I will not detain the House, but there is a long list of occasions on which the House has been asked to introduce legislation to bring our domestic arrangements in regard to one part of the law or another into line with judgments against us in the Strasbourg court. Under the last Conservative Government, that ranged from changes made with regard to the interception of communications to changes in respect of discretionary life sentences, included in the Criminal Justice Act 1991, and changes contained in the Crime (Sentences) Act 1997, passed in the dying days of that Government.

Mr. Vernon Coaker: This case raises huge issues that go to the heart of our judicial system and, indeed, our democracy, and one tends to worry about whether people fully understand all the ins and outs of the legal system. Will the Home Secretary consider how we might continue to engage the public in a discussion of questions arising from the case? Today's statement has

made a welcome start, but, given the fundamental importance of many of the issues, I feel that we should think about how best to engage the public in a discussion of them and their consequences.

Mr. Straw: It remains an unfortunate fact that the public are too detached from the way in which our judicial system operates, which in turn leads to insufficient public confidence in our court system. There are a number of ways of dealing with that. One is through a thorough review of the way in which the courts operate. I am pleased to say that, on Tuesday, my right hon. and learned Friend the Lord Chancellor announced just such a review, which is being undertaken by Lord Justice Auld, and which will take account of the implications of the Human Rights Act for the court system.
However, there is also the question of how we can involve victims more in the processes of the courts. We have to do that at every stage, whether victims have suffered a minor offence, or a grave crime, as in this case.
We have improved victim support funding. We are arranging for there to be victim and witness services at every magistrates court in the land. In addition, as I have made it clear to the House, we are looking carefully at how victim representatives can be involved in grave cases such as this.

Mr. George Stevenson: I welcome my right hon. Friend's measured response in this tragic case. Does he agree that all hon. Members should guard against the danger of giving the public the perception that we welcome European Court of Human Rights decisions that support the United Kingdom Government, but heavily criticise those that do not? Does he agree that such a perception, which may be held by the public in the light of some of the comments in the House today, could be dangerous?

Mr. Straw: As I have said, people have different views about the judgments. In a democracy, they are fully entitled to those views. In any event, I have to consider the judgments very carefully, but I have made the point that separation of powers, which is an essential feature of democracy, means that those in the Executive sometimes have to accept decisions that they may not find welcome.

Business of the House

The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business for next week will be as follows:
MONDAY 20 DECEMBER—Second Reading of the Transport Bill.
TUESDAY 21 DECEMBER—Debate on public expenditure on a Government motion.
The provisional business for the first week back after the Christmas recess will be as follows:
MONDAY 10 JANUARYSecond Reading of the Political Parties and Referendums Bill.
TUESDAY 11 JANUARY—Second Reading of the Child Support, Pensions and Social Security Bill.
WEDNESDAY 12 JANUARY—Consideration in Committee of the Representation of the People Bill [2nd Day].
THURSDAY 13 JANUARY—Conclusion of consideration in Committee of the Representation of the People Bill [3rd Day].
FRIDAY 14 JANUARY—The House will not be sitting.
I said that I would endeavour at the start of each month to give an indication of the business that is likely to be taken in Westminster Hall. The Liaison Committee proposes that the following business should be taken in Westminster Hall on Thursdays during January:
THURSDAY 13 JANUARY—Genetically Modified Organisms and Biotechnology—First report from the Science and Technology Committee, Session 1998–1999, HC 286; and the relevant Government response.
Fifth report from the Environmental Audit Committee, Session 1998–99, HC 384; and the relevant Government response.
THURSDAY 20 JANUARY—Debate on small firms.
THURSDAY 27 JANUARY—The Prison Service in Northern Ireland—Fourth report from the Northern Ireland Affairs Committee, Session 1997–1998, HC 716; and the relevant Government response.
The debates on Select Committee reports have been set down by direction of the Chairman of Ways and Means after consultation with the Chairman of the Liaison Committee.

Sir George Young: The House is grateful for next week's business and an indication of the business when we return. I am grateful to the right hon. Lady for implementing my suggestion last week that we bring forward the sitting hours on Tuesday.
Will there be a statement next week from the Secretary of State for Culture, Media and Sport on the future of Wembley, as his self-imposed deadline has expired and there is much speculation about the stadium's future? If we cannot have a statement, might oral Question 11 on Monday to the Secretary of State on the subject be taken at the end of Question Time, to allow an opportunity for further discussion?
Will the Foreign Secretary make a statement before we rise about Chechnya, where events are moving quickly, so that he can outline the diplomatic initiatives that he and other European leaders have taken to limit death and destruction?
While we are away, will the Government announce that 2000 is to be another year of delivery? If so, will they announce all the targets that they missed in 1999?
I see that, this time last year, my hon. Friend the Member for South Staffordshire (Sir P. Cormack) asked for the dates of the Easter and the Whitsun recess. I do not propose to push my luck, but for those hon. Members who like to plan ahead, is the right hon. Lady able to shine any light on the timing of the February constituency week? If she does not announce it today, the House will have to wait another month.
Finally, as this is the last business statement of the year, may I wish the right hon. Lady a merry Christmas and a bug-free new year? Those good wishes go to her staff, to Madam Speaker and to the staff of the House.
At the end of the last century, the House rose on 27 October for the Christmas recess, and returned on 30 January—a target, perhaps, for the Select Committee on Modernisation.

Mrs. Beckett: I thank the right hon. Gentleman for his acknowledgement that we have brought forward the timing of business on Tuesday. I think that that will be for the convenience of the whole House.
The right hon. Gentleman asked me about Wembley. I shall certainly draw his proposal to the attention of my right hon. Friend the Secretary of State for Culture, Media and Sport. The right hon. Gentleman will know that those matters are still under consideration, and that—although the initial deadline has passed—further work and consideration of the outcome are being undertaken. I am not sure whether my right hon. Friend will be able on Monday to say anything further on those matters; but, as I said, I shall draw the right hon. Gentleman's proposal to his attention.
The right hon. Gentleman asked whether the Foreign Secretary will be making a statement on Chechnya. I am not aware of my right hon. Friend's intention to do so; as the right hon. Gentleman said, the situation is confused. However, I shall draw the request to my right hon. Friend's attention.
I shall pass over the partisan remark that the right hon. Gentleman clearly felt it necessary to make, and merely tell him that the Government are well on course to meeting the targets that we set ourselves, both this year and at the general election.
I cannot give the right hon. Gentleman the dates of the February week—or say whether there will be such a week—although I understand, and am very mindful of, hon. Members' wish to know well in advance. However, as the right hon. Gentleman will know, I have also to be mindful of the progress of business, which is something that we have to take into account, and sometimes carefully monitor—especially when we have debates on, for example, whether a message should be received from the Lords.
I accept and am happy to return the right hon. Gentleman's good wishes, and I appreciate them. I share the wishes that he has expressed to Madam Speaker and her staff and to all the staff of the House.
I was also most interested in, and entertained by, the parallel that the right hon. Gentleman drew with the end of the previous century and the length of the Christmas recess in that year. I trust that the parallel will be taken


on board by the many Opposition Members whose reaction to the announcement of any recess is to say that it is too long, unprecedentedly long, and an abuse of position by the Government. I hope that they have learned from the historical parallels.

Mr. Paul Flynn: In the light of reports today that the Financial Services Authority is planning not to hold an inquiry into the mis-selling of mortgages, when can we debate early-day motion 11?
[That this House is alarmed at the continuing high sales of endowment mortgages; agrees with the Consumers' Association that endowments are 'risky inflexible products which typically pay seven times the commission of repayment mortgages'; calls for legislation to end the hidden charges and high redemption charges in other mortgages; and urges speedy compensation for the victims of mis-selling and the establishment of a financial advice service that will be independent of the selling process.]
There is abundant evidence that possibly millions of people have been mis-sold mortgages and that, if the inquiry is not held, they may be denied compensation.
We could also discuss the proposal that the Government should establish a website on which benchmark information—free of any need to make commissions—is given to the public. The general public have been using the NHS Direct website to gain information, and a financial advice website could both provide a valuable service and ensure that, for the first time ever, the public were able to receive advice entirely divorced from the need to earn commissions.

Mrs. Beckett: My hon. Friend makes an interesting point, which will be taken on board by the responsible Ministers. He also said that the Financial Services Authority has decided not to proceed with an investigation into mortgage mis-selling, but that is not entirely my understanding. I was under the impression that the FSA was still considering what action, if any, needed to be taken to improve standards. Nevertheless, as I said, I shall certainly draw his remarks to the attention of my right hon. Friends.

Mr. Phil Willis: May I, on behalf of Liberal Democrat Members, offer season's greetings to the right hon. Lady, her staff and all Officers and Members of the House?
I also thank her for the business statement. We appreciate that the first week in January will be extremely busy. However, will she either make arrangements for the Secretary of State for Education and Employment to make a statement to the House on the prospectus that was issued this week on the Learning and Skills Council, or provide time for a debate? The relevant Bill will be introduced not in this place but in another place on 20 January. The decisions involve a £6 billion budget, but we shall not have an opportunity to discuss the prospectus before the orders are laid before the other House. That is a crucial issue for a statement or a debate.

Mrs. Beckett: We all recognise the importance of my right hon. Friend's proposals. The House will have a proper opportunity to consider them and will wish to look

carefully at the issues. I cannot undertake to provide time for a special statement when our proposals will be in the public domain.

Mrs. Gwyneth Dunwoody: Neither my right hon. Friend nor I are into gesture politics, but the House of Commons has a long and honourable record of seeking to protect the human rights of those who are not British citizens. Before she goes on holiday, will she draw the attention of the Foreign Office, and possibly the Home Secretary, to the case, highlighted on "Newsnight" last night, of a Hungarian detective who, in seeking to investigate frightening scams in Hungary, has been personally attacked and subsequently arrested on a trumped-up charge? If Hungary is to be an applicant to join the European Community, it is time it was reminded that police investigations of specific crimes are fundamental and basic procedures that we expect applicant states to support.

Mrs. Beckett: I respect my hon. Friend's serious approach to politics and I take her point entirely. I was not familiar with the case that she has raised, but I shall ensure that her remarks are drawn to the attention of my right hon. Friends the Home Secretary and the Foreign Secretary, as she requested.

Mr. Peter Atkinson: Will the Leader of the House ask the Home Secretary to come to the House and explain why Mr. Alan Donnelly, the Labour Member of the European Parliament for North-East England who has resigned, will be automatically replaced by a Labour candidate who stood, but was not elected, at the European elections? Surely there should be a by-election so that the electorate of the north-east can choose the candidate whom they want to represent them.

Mrs. Beckett: I am not prepared to ask the Home Secretary to come to the House to reaffirm a decision that has already been made by the House.

Mr. Michael Jack: Why has there been no mention so far in the Leader of the House's list of forthcoming attractions of a debate on the defence industry and Government policy towards it? Many thousands of my constituents work in the aerospace defence industry. They are very anxious to debate with Ministers the future of projects such as Meteor, the RAF's future heavy airlift capacity and the implications for British defence policy of the formation of BAE Systems. When might such a debate take place?

Mrs. Beckett: I cannot give the right hon. Gentleman the date for such a debate, but the Government are anxious to bring the defence White Paper before the House as soon as we can. We shall want to hear the views of the Select Committee on Defence before we have a debate in the House, but I assure the right hon. Gentleman that we shall have a debate as early as we can.

Mr. Patrick McLoughlin: In this year of supposed delivery by the Government, will the Leader of the House arrange a debate on prescriptions given by health authorities? How does she advise me to
reply to an elderly constituent of mine from Ashbourne whose husband is suffering from Alzheimer's disease? She says:
the doctor cannot prescribe the drug Aricept which may help him because the Southern Derbyshire Health Authority will not fund it. I am told that if we were over in border in Nottinghamshire that we would be able to obtain this drug.
When will my constituent be able to get the drug to help her husband to overcome his debilitating disease?

Mrs. Beckett: I have every sympathy for those who care for people suffering from Alzheimer's. It is a terrible disease, and the stress that it places, particularly on the carers and families of sufferers, is extreme. However, the effectiveness of Aricept—as well as its availability—is contested, and it is not necessarily suitable for all cases. [Interruption.] I wish the hon. Member for Bromsgrove (Miss Kirkbride) would not twitter—it is very distracting. The National Institute for Clinical Excellence is studying the matter, and the Government will give its report the most serious attention.

Sir Sydney Chapman: In wishing the Leader of the House the compliments of the impending season, recognising that she is a fair-minded person and hoping that she is a far-sighted person too, may I ask her to agree that it would be entirely appropriate, at the dawn of a new millennium, if the Government were to provide for a day's debate on the Floor of the House on the problems facing our earth in the immediate future? Given that the population of our world has trebled in the last 70 years, and is expected to increase by a further 4 billion in the next 50 years; given that three quarters of the world's population is on a spectrum varying between under-nourishment and starvation; given that the land on which we can grow food is diminishing, and that our seas are being depleted of fishing stocks, does she agree—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We cannot have a debate just now.

Mr. Eric Forth: I blame the Government for all those things.

Mrs. Beckett: The right hon. Member for Bromley and Chislehurst (Mr. Forth) will always blame the Government—including for the increase in population, for which we have some responsibility on a minor scale.
The issues raised by the hon. Member for Chipping Barnet (Sir S. Chapman) are serious and fundamental, and they will be aired in a variety of forums in the new term of Parliament which begins after Christmas. I fear that I cannot undertake to find time for an early debate on the matter, but I remind the hon. Gentleman that Environment questions will be held on the second day back.

Mr. Edward Leigh: May I, too, wish the Leader of the House a merry Christmas and a happy new millennium? Will she confirm that it is a cardinal principle of any self-respecting Parliament that there should\be equal access to the Houses of Parliament for all hon. Members? Can we start the new millennium as we mean to go on? Will she give a commitment that,

on millennium night, as the minutes tick away to midnight, no member of the Government or any official or officer for whom the right hon. Lady is responsible will be enjoying the facilities of this House while the building is closed to all hon. Members? Does she agree that it is a principle of a good general that he does not reserve perks to himself that are denied to the poor bloody infantry?

Mrs. Beckett: The hon. Gentleman—may I return his good wishes?—will be aware that access to the House is a matter for Madam Speaker, and that she has given her ruling on this matter. I cannot recall whether the hon. Gentleman was referring to the entire course of the evening. There will be a reception at some point for winners of the millennium awards, who are not in any way, shape or form members of the Government. I am sure that the hon. Gentleman would not be so churlish as to deny them that recognition. I am afraid I am not aware of what other members of the Government are doing for the rest of the evening.

Mr. Douglas Hogg: Will the Leader of the House arrange for an early debate so that we can discuss how to make more accountable to this House Ministers who are sitting in the other place? The right hon. Lady will know that there are three Ministers in the other place who exercise important responsibilities: the Attorney-General, Lord Williams of Mostyn; Lord Falconer; and the latest Transport Minister, Lord Macdonald. I am not attacking them as individuals—no doubt they are splendid folk. However, these individuals exercise authority of considerable importance which touches on our constituents, and it is profoundly unsatisfactory that they are not accountable to elected Members. Can we have a debate as to how we can improve accountability in a democratic state?

Mr. Andrew Mackinlay: Remember Lord Young and Lord Carrington.

Mrs. Beckett: My hon. Friend is entirely right: there is nothing unprecedented about the holders of senior positions being in the House of Lords. He reminds me that a Foreign Secretary in the Thatcher Government sat in the Lords. I rather believe that Lady Chalker may have been Minister for Transport; she was certainly an Overseas Development Minister. There are many precedents.

Mr. Mackinlay: Lord Cockfield.

Mr. Deputy Speaker: Order. It is unnecessary for the hon. Gentleman to interrupt. The Leader of the House is doing well on her own.

Mrs. Beckett: That is very kind of you, Mr. Deputy Speaker, although I must admit that I am grateful to my hon. Friend.
Not for the first time, not only the sense of history but the memory of Conservative Members is rather failing them.

Mr. John Hayes: I have no wish to be unnecessarily partisan, but necessity in these questions is a matter of fine judgment.
Will the Leader of the House acknowledge that street crime in London is on the increase, police morale is falling and there is widespread concern about the police strategy? Dr. Marian Fitzgerald's research produced a telling report criticising the strategy in London, for which the Government must ultimately take responsibility. Will the Leader of the House accede to her request for action, which is supported by victims, even by some former criminals and by the wider public? Given that this is literally a matter of life and limb, will she arrange an urgent debate to allow us to ask why, in the Government's supposed year of delivery, all that they are delivering in London is rising crime and falling police morale?

Mrs. Beckett: Again, Conservative Members' memories are failing them. Crime rose steadily throughout their period in office. We all greatly regret that. I am aware of the Fitzgerald report, and I know that my right hon. Friend the Home Secretary is carefully studying the issues that it raises. I fear that I cannot undertake to find time for a very early debate on the matter, although I have no doubt that the House will want to return to it and study it carefully.

Mr. Stephen O'Brien: The Leader of the House will recall that I asked last week whether she would make available time for the Law Officers to come to the House to make a statement about the legal options open to this country in the light of the continued ban of our beef by France. Nothing has been forthcoming. The possibilities include injunctive relief. Our farmers have suffered another week of their desperate plight and I am looking for a response—please—so that we can tell our farmers what options we have. Forget a year of delivery: a week of delivery would be very nice, thank you.

Mrs. Beckett: I can only tell the hon. Gentleman what I told him last time: there will be oral questions during the first week back, and it is very clear where we stand legally, as the French Government are being taken to court and have been given a tight timetable within which to respond.

Mr. O'Brien: Injunctive relief.

Mrs. Beckett: I am aware that the hon. Gentleman raised the issue of an injunction, and I have no doubt that that point has been taken on board. All Governments from time to time deal with issues that come before the European Court. I have not taken the mind of my colleagues on this matter, but it occurs to me that there may be times when the British Government would not want a rush to an injunction, and I can well imagine Conservative Members complaining bitterly if such a step were taken. All the factors must be carefully considered and I have no doubt that the Law Officers are indeed considering them.

Mr. Michael Fabricant: A few moments ago, we had a very serious statement on the ruling by the European Court of Human Rights on the Thompson and Venables case; but that is not the only ruling issued by the court today. Has the Leader of the House received a request from the Secretary of State for Social Security to make an urgent statement to the House about the

Government being overruled on the payment of winter fuel benefit to men over 60? That will cost the Government an extra £30 million.

Mr. Forth: The taxpayer, not the Government.

Mr. Fabricant: Indeed, the taxpayer. One and a half million people will benefit, which I suppose is the good news. Far more seriously, it seems that the judgment is part of a major campaign, the ultimate objective of which is equal state pension ages for men and women. If the European Court of Human Rights accepts that, it will cost the Government and the taxpayer billions of pounds. When will a statement be made; and when will the Secretary of State apologise to the House for having passed legislation just 11 months ago that has so quickly been overruled?

Mrs. Beckett: The hon. Gentleman's point is rather silly, because no Secretary of State can introduce legislation on the assumption that no court will ever make changes in it. However, the hon. Gentleman's initial remarks raised a serious issue. I understand that my right hon. Friend the Secretary of State for Social Security had not been aware that the judgment was to be made public this morning; otherwise, he would have made arrangements to inform the House. A parliamentary question has now been tabled and will be answered on the next sitting day. My right hon. Friend is considering urgently how he can inform right hon. and hon. Members of the judgment.

Dr. Julian Lewis: Has not one product of the so-called year of delivery been the delivery of a parody of a democratic electoral system for European elections? Out of 89 MEPs elected last June, only 29 were Labour. Within six months, two of them have voluntarily stepped down and there is no prospect of a by-election at which the electorate could punish the Labour party for such irresponsible behaviour. The Leader of the House has already said that the Home Secretary will not make a statement about the disgraceful and undemocratic system that has been imposed, but will the relevant Foreign Office Minister make a statement about what the Labour party is playing at when two of its derisory total of 29 MEPs have stepped down in this opportunistic and dishonourable way?

Mrs. Beckett: I can only conclude that it hurts Conservative Members deeply that the Labour Government are engaged in a year of delivery—that is obviously the line of the week—with the arrival of the national minimum wage, the working families tax credit and the greatest ever increase in child benefit. The Conservatives opposed all those measures and would remove them. It is unwise of the Conservatives to keep reminding the public of those facts, but that is only one of the unwise decisions that they have made.
It was the House's decision to introduce the system for the European elections, and much nonsense was talked about how it was unprecedented for people to have only one group of candidates to choose from. That is precisely the system that we use in our general elections, in which we do not have a range of Conservative candidates—for


example—to choose from. Indeed, when we do, as in the mayor of London election, the Conservatives make a real mess of it.

Dr. Lewis: By-elections.

Mrs. Beckett: I am coming to that point. I understand the enthusiasm for by-elections among Conservative Members and the news media, but I have never observed that that enthusiasm is shared by the public. In any event, there is no ministerial responsibility for the resignations.

Mr. Desmond Swayne: After the welcome statement from the Prime Minister's spokesman yesterday about a U-turn on the Government's delivery of a fox hunting policy, in that the Bill to be introduced by the hon. Member for Brent, East (Mr. Livingstone) was doomed to fail because of lack of parliamentary time, may we have a statement from the Home Secretary? The Leader of the House will remember that we had a written answer on the last day of the previous Session that said that the Government would give time to such a Bill. Given that the millennium dome is now infested with foxes, the Government's U-turn is welcome, but may we have a statement to explain the change of policy?

Mrs. Beckett: Yet again the hon. Gentleman is mistaken. There is no change of policy, and I know that that will be a deep disappointment to him. The Government have undertaken to provide time for a private Member's Bill, but we have made it plain that we wish first to see and digest the report on the impact of hunting from the Burns committee. When that has been received and presented to Parliament, the Government will be prepared to try to find time to assist a private Member's Bill, should a suitable opportunity arise.

Mr. Owen Paterson: May I offer the Leader of the House the best wishes of the season?
On 21 September 1995, the present Prime Minister said, as reported in the Financial Times, that he had no plans to increase tax. Since then, we have had a deluge of taxes amounting to £40.7 billion, according to the Library, which is an impartial source respected on both sides of the House. Before the Select Committee on the Treasury, the Chancellor admitted that taxes had gone up, and we had a spirited debate at Treasury Question Time in which other Treasury Ministers expressed doubts about the Library's figures. I trust the Library figures.
Will the Leader of the House deliver to the House the present of a full debate on the Government's increases in taxation during this so-called year of delivery?

Mrs. Beckett: I really do not understand why the Conservative party continues to make that claim when it is quite evident that, before, during and since the election, it has done nothing but complain about the windfall tax. Indeed, before the election, it made much—

Mr. Paterson: Table B1!

Mrs. Beckett: It is no good the hon. Gentleman shouting and waving tables. Before the election,

Conservative Members endlessly referred to the fact that we, as the then Opposition, refused to commit ourselves to anything beyond not raising the rate of income tax for standard rate payers and for higher rate payers. So it is no good their now trying to convince the British people that they were in some way unaware of—(Interruption.]

Mr. Deputy Speaker: Order. The hon. Member for North Shropshire (Mr. Paterson) will behave himself. He has just been called to ask a question, but then he misbehaves. He was not misbehaving before he was called.

Mrs. Beckett: I fear that the hon. Gentleman is a serial misbehaver.
The hon. Gentleman's main point was to ask me to find time for a special debate. I simply draw to his attention something that he may have overlooked: there will be such a debate on Tuesday 21 December.

Mr. Forth: In the interests of open government and to allow the Prime Minister the opportunity to set the record straight, will the Leader of the House provide an urgent opportunity for the Prime Minister to come to the House to explain what that nice Mr. Jospin really said to him about beef, and particularly about Scottish beef? That would also allow the Prime Minister to explain to us what he apparently did not say to the First Minister in Scotland. It might even give the First Minister, who is still the distinguished right hon. Member for Glasgow, Anniesland (Mr. Dewar), the opportunity to explain to the House what he did not hear from the Prime Minister about what the Prime Minister had heard from the Prime Minister of France.
This is a very worrying matter. It touches not only on the intimate relationship that the Prime Minister claims to have with his European counterparts, but on the whole matter of devolution and what on earth is going on between the Prime Minister and his Scottish First Minister.

Mrs. Beckett: The right hon. Gentleman has not been reading the Daily Mail with his usual assiduous attention—otherwise, he would have seen in yesterday's edition the remarks of the president of the National Farmers Union of Scotland, who said:
At no stage … were there any serious and detailed proposals put forward by France to allow Scottish beef to return to the French market.
He added, as reported in The Independent:
This can only be a blatant attempt by the French to shift attention away from their unwarranted and illegal action and to attempt to drive a wedge between different parts of the United Kingdom.
I rest my case.

Miss Julie Kirkbride: rose—

Hon. Members: Twitter away!

Miss Kirkbride: Quite so. If the right hon. Lady has seen page 2 of The Sun today, she will know that my right hon. Friend the Leader of the Opposition has been


crowned by The Sun as king of the Commons. That follows the Prime Minister's risible performance yesterday when, in response to my right hon. Friend's questions, he sought to justify his failure in the year of delivery. Clearly, the business of next week has been so organised that the Prime Minister does not have to appear again to make a further risible performance. However, will the Leader of the House consider holding Prime Minister's Question Time on Tuesday next week, so that my right hon. Friend can have his crown reconfirmed—or is the Prime Minister frit?

Mrs. Beckett: I was of course present, as always, at Prime Minister's Question Time yesterday. I thought that

there was a risible performance; it was that of the Leader of the Opposition, who fell way below even those low standards that he has occasionally set—

Mr. McLoughlin: You cannot be serious.

Mrs. Beckett: Yes, I am serious: it was pathetic.
I have not seen page 2 of The Sun and the hon. Lady should probably be grateful that the Leader of the Opposition does not appear on page 3. However, I recall that the right hon. Gentleman recently made newspaper readers aware of his top 10 favourite jokes. He is good at jokes, and they are what he should stick to.

ESTIMATES DAY

[1ST ALLOTTED DAY, 1ST PART]

VOTE ON ACCOUNT 2000–01

Class III, Vote 6

Aviation Safety

[Relevant documents: Fourteenth Report of the Environment, Transport and Regional Affairs Committee, Session 1998-99, Aviation Safety, HC 275, and the Government's response thereto, Cm. 4539; and the Department of the Environment, Transport and the Regions Annual Report 1999: The Government's Expenditure Plans 1999–2002, Cm. 4204.]

Motion made, and Question proposed,

That a sum, not exceeding £511,039,000, be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charge for the year ending on 31st March 2001 for expenditure by the Department of the Environment, Transport and the Regions on support to nationalised industries; grants to Railtrack, British Rail, London Transport, Docklands Light Railway, DoA Ltd; MRPS grant; payments in respect of expenditure relating to the Channel Tunnel Rail Link; expenditure connected with the privatisation of British Rail Business; other consultancies; expenditure relating to Commission for Integrated Transport; capital expenditure by transport industries funded by EC grants; railway industry and National Freight Company pensions funds; National Freight Company travel concessions; rebate of fuel duty to bus operators; ports and shipping services; Royal Travel; miscellaneous services; civil aviation services; international aviation services; transport security; freight grants, and expenditure associated with the non rail privatisation programme.—[Mr. McNulty.]

Mrs. Gwyneth Dunwoody: Aviation safety is not a subject that can ever be treated lightly. Since the creation of the aviation industry, this country has had an extremely good safety record. Britain has built up a worldwide reputation for understanding the needs and priorities involved in keeping passengers and pilots safe.
The Transport Sub-Committee of the Select Committee on the Environment, Transport and Regional Affairs undertook a detailed investigation of aviation safety. We did not want to disturb the industry's good reputation, nor to encourage the public to believe that there had been obvious instances of backsliding from the standards that we have always maintained. However, it would be foolish to pretend that United Kingdom Governments have always had clear and coherent policies with regard to aviation. Indeed, one of the worries is that, for some years, the House of Commons has not been treated to clear guidelines about the future of the aviation industry.
The Select Committee set out to look closely at all aspects of the working of the safety regulations, in general aviation and in the commercial sector. We were very worried that changes that might be taking place in the near future might cause details of aspects that we considered essential to be, if not ignored, then at least overlooked.
The Committee submitted a very detailed and carefully researched report. I hope that the Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Sunderland, South (Mr. Mullin),

will not misunderstand me when I say that I find the tone of the Government's response rather disappointing. That may reflect one of the problems raised in the report. We were concerned about what can only be described as the complacency of the aviation industry, and it is important to spell out exactly what we meant by that.
The Committee took a lot of information and evidence from all sectors of the industry. We were worried—there is no point in pretending otherwise—that the industry was not prepared to look too closely at its behaviour and its future, in case the public got the idea that a severe and real problem existed. We were careful to make it clear that it was not the Committee's aim or intention to put that idea in people's minds, as it did not accord with our experience.
However, we considered that the industry would be underestimating its own position if it gave the impression that it was content with the status quo and implied that, as everything was already perfect, there was no need for close examination of safety matters. I had hoped that Ministers would be prepared to read the report in a way that would enable them to take on board some of the difficulties that we discovered in our researches.
I want to put it on record that the Committee is satisfied that the United Kingdom is fortunate in having very professional pilots, engineers and—above all—air traffic control officers. The safety ethos is absolutely fundamental for those people, but the Committee is worried about relationships inside the industry. They may be a little too convivial. Close monitoring by Government institutions is essential and is in the best interests of the industry itself.
Some difficulties could be dealt with by the clear separation of the safety regulation group from the Civil Aviation Authority into an independent, free-standing operation, as the Select Committee recommends. At present, they operate closely and, obviously, the industry must co-operate on a day-to-day basis. Nevertheless, the Select Committee believes that it is essential that there should be a clear division between National Air Traffic Services and the CAA and that that division can be seen to be operating.
I should like to take up other points in the Government reply. Would my hon. Friend the Under-Secretary like to give me an answer to the question of virtual airlines? The Government seemed to say that, in the aviation industry, some people would wet lease aircraft and then be prepared to subcontract every aspect of the work, but that was not a real problem because there was not too much evidence that happens. Can my hon. Friend give the number of aircraft that are operated on behalf of United Kingdom airlines which are flying for hire and reward out of the UK, which are not on the UK register and which are subject to UK safety oversight or the flight operations inspectorate review? Those aircraft will carry British citizens, so we have a right to say to the Government that it is not good enough for them to say that they are not aware of anybody carrying out that particular operation, so it is not a problem. The operation of such aircraft is a virtual airline, even as defined by the Government, and it is tremendously important that we look closely at this. Air Foyle and Heavylift operate Russian-registered cargo aircraft. They are interesting examples of the sort of problem that concerns us.
Can the Minister advise us how many recommendations the air accidents investigation branch has made in the past 10 years and how many have been implemented or subject to an airworthiness notice by the CAA Airworthiness Requirement Board? How many of those relate to the outcome of the Manchester 737 accident? We ask these questions because we believe that they are relevant to the Committee's work. Can the Minister tell us whether the AAIB now has all the qualified staff and resources that it will need to meet the size of the task that it has in a developing and increasingly active industry?
The Minister will know that we raised the subject of helicopter inspection because we were concerned that it seemed that some inspectors might have several skills but not necessarily those connected with the helicopter industry. The Minister will know that helicopters are different aircraft with different needs and responsibilities. Would my hon. Friend accept an inspector with a public service vehicle licence being drafted into the railway system to operate as part of the railway inspectorate? I do not think that he would. Therefore, I should like to know that all those involved in helicopter operations inspection are qualified helicopter pilots with substantial helicopter operating experience. As my hon. Friend will know, unfortunately there have been a number of incidents which have raised considerable worries about what happens with helicopters, and the public need to be reassured.
We come now to our perennial friend, the enroute centre at Swanwick. Is the Minister really going to tell us that the centre will open during the winter of 2001–02? Will the specifications be exact? Will the centre be fully operational, and will it provide the necessary increase in capacity? The aviation industry has a greater rate of growth than almost any other in the country. It is shooting ahead, and will continue to do so. Given the pressures on air traffic controllers and air space, the functional systems will be crucial. Unless we can be sure that those systems will operate in the way that will best protect the interests of the general public, we will have some very real worries.
I want to ask about foreign aircraft inspections. Does the increase in the level of inspections include inspections of aircraft that are operated on behalf of United Kingdom airlines flying for hire and reward out of the UK which are not on our register and subject to UK safety oversight?
There are difficulties in relation to planes overflying the centre of our cities. I tabled some questions to the Minister, and expected to be told that cases of aircraft flying over central London on their way to Heathrow with one engine inoperable numbered one or two at most. I was stunned to find out that there had been 17 such cases. I hope that the Department is investigating this with some vigour and is not prepared to rest on the assumption that planes can fly safely with one engine. I am happy to know that a two-engine plane can fly with one engine, but if it is also running low on fuel, as has happened in some instances, many people in this capital city will say that that is not ideal.
There have also been instances of very large aircraft landing at Heathrow with almost empty tanks. I would like to think that those are isolated incidents but, if they are not, I hope that the Minister will be able to tell me rather more than he did in his answer to my question. It is not good enough to say to the House of Commons, "It doesn't happen very often." The one time that it does go wrong, a number of lives may be at risk, and we may

have good reason to regret that any aircraft was able to operate in such conditions over our capital city. I shall not second-guess aircraft commanders, who take the final decision on safety but there are very real worries. I hope that we shall be given information this afternoon that is more positive than hitherto.
We were concerned about the training of engineers in the aviation industry. Again, I am sorry to say that the reply was rather complacent. In the past, aircraft engineers were very specialised and were trained accordingly. Unfortunately, evidence to the Select Committee showed that we are losing a whole generation of engineers. Many of them are retiring and are not being replaced. We would like to know that the Government are confronting the situation and are not content simply to say that it is a matter for the industry. It will not be a matter for the industry if we suddenly find ourselves with operational difficulties. We should consider not only the training of aircraft engineers but how we can bring more people in to the industry and encourage them to maintain the high standards that we have had in the past.
The issue also has a knock-on effect on training people to fly. The United States, which has a very large industry, has the advantage of extremely good weather in many parts. It can encourage people from all over the globe to go there and receive aviation training; not only are the standards of training different from ours, but the cost is much lower. Since we have the expertise, I hope that we can come up with practical ways to lower costs for people who want to fly and to encourage them to remain within the UK.
I shall not go into detail on the aircraft cabin safety problems mentioned in our report. However, the Government responses continually tell us either that the Government are thinking about a particular difficulty or that, for one or another reason, they do not think a point of any importance. Cabin safety has been dismissed as capable of producing neither any new research nor any response. That seems cavalier and unimaginative. If there are problems with aircraft and air cabin safety, the Government should examine them, rather than saying that they have read what the Committee has said, but are not impressed and need not worry further.
The House of Commons entrusts Select Committees with the role of scrutinising industries sponsored by Whitehall Departments because the detailed examination of problems likely to arise is something that Select Committees do best. We are able to question Ministers, to raise detailed problems with those who give evidence and to call a wide cross-section of people before us, as we did when we compiled the report. On general aviation, commercial flying and helicopters, we considered all the difficulties that we foresaw, and we have attempted to produce a report that is not sensational, that does not seek a hysterical response but that demands serious answers.
We were disappointed with the quality of the Government's response. We felt that our work merited rather less complacency and rather more vigour. For the first time in many years, a Government have said that they will have a policy on aviation and produce a detailed document. They say that they will treat the industry with seriousness that it has not been given in the past. That is both essential and welcome, but there are matters for the Minister to consider in the interim.
We value the work being done in his Department, but the appendices to my Committee's report contain, at page 192, a simple graph from the Boeing company titled "We need to continuously improve aviation safety". That graph clearly shows the gap already opening up. We need to close it. We are therefore right to say to the Minister and everyone else involved that the industry may be very safe, but it must not be complacent or assume that no change is needed. The industry must create inspectorates that are seen to be independent and must address whether they have sufficient and properly trained staff. It must also address whether the independent safety authority will be properly funded, and it must do it now.
The Minister, like the rest of us, saw the public response to a savage train accident recently. We can tell those involved in it that accidents are rare—that, happily, they are not a common occurrence—but the public responded by telling the Government to take difficult safety decisions, and to do it now. The public did not want safety left to the commercial end of the industry. If that is true of railways, it is triply, quadruply, eternally true of the aviation industry. I hope that my hon. Friend can give us more heart today than he did in his response to my Committee.

Mr. James Gray: It is a great pleasure and privilege to follow the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), as it is to serve behind her on the Transport Sub-Committee of the Select Committee on the Environment, Transport and Regional Affairs. She and I do not always agree, but we enjoy our exchanges across the Committee Room table. I welcome my hon. Friend the Member for Poole (Mr. Syms) to the Front Bench. His Back-Bench colleagues very much look forward to hearing what he has to say in an important, if slightly ill-attended, debate.
The debate is important because aviation in the United Kingdom is at present 100 per cent. safe. It was interesting to hear the hon. Lady raise the difference between perception and reality. We must say as clearly and frequently as we can that there is no lack of safety in the UK. The aeroplanes, pilots, airports and air traffic controllers display no slippage of safety. We probably have the safest air travel in the world, as several people who gave evidence to the Committee acknowledged.
None the less, two points must be made. Perception may differ from reality. As the hon. Lady said, that is certainly true of the railways. We must pay as much attention to ensuring that the travelling public know that travel is safe as we do to making it so. A good example of the difference between perception and reality is the Y2K problem. I understand from airlines that there has been a significant decline in air travel scheduled for the millennium evening and the next day. People are concerned about Y2K even though anyone who knows anything about it is convinced that there will be no danger of any kind to the travelling public on 1 January 2000.
Secondly, in saying how safe air transport is, one must leave no room for complacency. If some of the changes recommended in the report are not made, British aviation may not remain as safe as it is today. It is important that the Committee held its inquiry and produced a valuable

report in which nearly every word is eminently sensible. Like the hon. Lady, I have large reservations about the quality of the Government's response, and I look forward to hearing the Minister explain the thin and disappointing nature of some of his responses.
I shall focus on two or three air safety issues rather than the generality of the report. As the hon. Lady said, air traffic has increased hugely during the past few years. Over the next 10 years, it is predicted to increase by 50 per cent. That prediction applies particularly in the south-east of England. When I worked at the former Department of the Environment, there was a constant cry of Rucatse—runway capacity in the south-east. The subject continually appeared in the Secretary of State's red box, and there were constant discussions about what we could do about runway capacity. That problem remains to be dealt with. We must find more capacity, or our high safety standards will, without question, be compromised.
A related matter to which the hon. Lady made little reference was the future of the National Air Traffic Services. Without a vibrant and successful NATS, our high standards may be compromised. Already, there are signs that overload on controllers has grown. The volume and complexity of traffic has increased overload to 49 incidents this year—double the number in the previous year. Overload is increasing, and if Swanwick is not in place in good time, that increase will continue.
It will interesting to hear what the Minister has to say about Swanwick. His predecessors offered dates for when Swanwick would be up and running, but these dates always slipped. The latest date given, I think, was April 2002, and it would be interesting to hear the Minister confirm that, although he would doubtless be putting his job on the line by doing so. He looks as if he may be about to intervene to confirm that date, or not.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Chris Mullin): I am grateful to the hon. Gentleman for giving way. Many of my predecessors were members of the Government whom he supported, and many of the problems at Swanwick arose during their time in office. I hope that he will bear that in mind when he deals with the problem, and that he will do so in a mature and responsible way.

Mr. Gray: I am grateful to the Minister for pointing that out. I try to do everything in a mature and responsible way, so I shall follow the precedent.
I acknowledge that the situation is as the Minister describes. When the project was launched, the completion date was set for 1990 or thereabouts, and it has gone back and back. That has happened under both Governments.
I always try to avoid party political splits and divisions on the Select Committee, as my colleagues across the Floor will doubtless agree, and try to address the issues in as broad a bipartisan way as we can. I prefer to leave out the party politics for the moment, although one or two of the topics that I shall cover later may contain a small element of party politics.
We need to know when Swanwick will be up and running, and what effect that will have on air safety in England. What will happen to NATS? The Government claim to have come up with some clever public-private


partnership. The truth is that no one has the remotest idea of what it is or how it will work. It seems that 48 per cent. will be in the private sector, 5 per cent. with the workers and the balance with the Government.
Who will control the company? Who will run it? Who will have responsibility for employment matters? Who will take the risk if the company goes down? Who will benefit if the company makes a large profit? Who will make the decisions? All that is unclear. The Government display a split personality with regard to privatisation, as in the case of DERA—the Defence Evaluation and Research Agency. They cannot decide whether to privatise it or not—apparently not, at present. On the future of London Underground, one moment the Government are doing complicated deals with Rai1track, and the next minute they are not, for reasons best known to themselves.
I am puzzled by the figures that the Government produced in the explanatory notes to the Transport Bill, which will receive its Second Reading on Monday. According to paragraph 233 on page 40, the partial sale of NATS
could raise in the region of £350 million.
Of that, £300 million goes to pay off NATS's debts. That leaves a balance of £50 million. Of that £50 million, as I understand paragraph 233—if the Government are wrong again, perhaps the Minister will correct me—an astonishing £35 million goes to my former colleagues in the City of London in fees of one sort or another, apparently leaving a net figure of £15 million for the privatisation of NATS. If the Minister wants to correct that, I dare say he will. It will be interesting to know how much money the Treasury intends to net from the sale of NATS.

Mr. Mullin: I am grateful to the hon. Gentleman for allowing me to intervene again. He is probably aware—but perhaps he is not—that I and my right hon. and noble Friend the Minister for Transport attended the Environment, Transport and Regional Affairs Committee last week. We were grilled on that topic very ably, as one would expect from my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). The hon. Gentleman was not present, nor was any member of the Conservative party. That would have been the place to get the answers to some of his questions.

Mr. Gray: The Minister has not answered the point, but no doubt he will do so when he winds up. On that day, we had an Opposition day debate on transport in the Chamber, in which I spoke. I took the view that my duties in the Chamber overrode my duties to the Select Committee. If the Minister cares to consult Hansard for that day, he will discover that I made a reasonable speech on that occasion. That is the reason why we were not present in the Select Committee. An Opposition day debate in the Chamber seemed to be an occasion of some importance, although perhaps the Minister does not recognise that. [Interruption.] I asked him a direct question—

Aft Deputy Speaker (Mr. Michael J. Martin): Order. The Minister does not have licence to shout across the Floor. He may not do that.

Mr. Gray: Thank you, Mr. Deputy Speaker.
The House will have noticed that I made a particular point about the net take from NATS. The Minister intervened, apparently to give me the answer, but all he could do was to make a cheap party political point about the fact that I was not present in the Select Committee because I was doing my duty in the Chamber. That is a strange way for a junior Minister to behave, but the House will have noted what he did.
Because of the way in which the risk transference may or may not occur in the proposed privatisation, my reading of the explanatory notes to the Transport Bill is that the net take to the Treasury will be £15 million. If that is an incorrect reading, the Minister may care to explain what will happen to the £300 million debt, who will take that debt on, how it will be transferred and what the net take to the Treasury will be.
All of us who are considering the privatisation of NATS will be interested to hear that. If the Treasury will achieve a large take and spend the money on something useful—in the transport sphere, I hope, as is claimed—perhaps that will encourage us to go along with the Government's rather muddled proposal. If, however, the Treasury take is only £15 million, we must ask why the Government propose to carry out the privatisation. I expect that some Labour Back Benchers may ask the same question.
The privatisation of NATS is the first issue on which the Government must be straightforward. The Minister will come up with the notion of the golden share. He will tell us how important the golden share is, that it means that the Government will not lose control of NATS, and that we can be certain that NATS will remain a British organisation. Will he tell the House what he makes of the European Commission's current challenge on the ownership of golden shares in other companies, particularly BAA?
Will the Government be able to have the golden share? Will they be able to guarantee that, for example, the French and German companies currently looking at NATS will not be allowed to take control of Britain's airspace? Before the general election, the Labour party went to great lengths to assure us that one thing that was not for sale was Britain's airspace. Like many of their other early pledges, that one seems to have gone down the tubes.
NATS is the first matter of concern to me. The second is Europe. There are various aspects worth examining. We wholly support the notion of co-operation with other European states on air traffic control. We would be mad if we did not. Of course we want to make certain that all 28 European countries that take part in Eurocontrol co-operate in controlling our airspace.
That is quite different from doing what is proposed if the European Union becomes part of Eurocontrol. That is not co-operation, but integration. It implies that a European body has integrated control of the airspaces. That means giving up BAA-NATS control of British airspace to a European organisation—a sort of federalism of the air. Many commentators on the proposal have said exactly that. One of them said that, if European countries have given up control of the land borders, they should also give up control of the air borders.
I am sorry to introduce a party political point, but the Conservative party firmly believes that we should keep our land borders and our air borders, not least because our standards of air traffic control are in many respects a great


deal better than those of some of our European partners. Like any other such integration, the lowest common denominator will be the standard. There will be co-ordination across Europe at the lowest level of any European country. If there were such co-operation across Europe, there would unquestionably be a lowering of British standards.
A similar argument applies to the Joint Aviation Authority, which seeks to ensure uniform safety standards across the member states. At present, its decisions are not legally binding on the member states, although there is a suggestion that that may become the case. The House will be aware that the UK Flight Safety Committee gave evidence to the Select Committee and described the JAA as a camel train which is
as quick as the slowest camel in the train.
That is quite a good description of the averaging down to the lowest common denominator that I described with regard to Eurocontrol. It is unfortunate that the UK's excellent record in aviation safety may be forced lower to fit in with that of our European partners.
My greatest concern relating to Europe involves the proposed European Aviation Safety Authority—EASA—which would operate using qualified majority voting. If that happened, debates such as this in the Palace of Westminster on the subject of air safety would no longer have any purpose. Parliament would no longer have its say over air safety across Europe. That would be handed over to a European organisation with qualified majority voting, and we might find ourselves, as we so often do in a European context, in a minority of one. I am happy to be in a minority of one so long as we have a veto. However, qualified majority voting would prevent us from vetoing our European partners' proposals.
The Select Committee considered that the UK aviation industries proud record might be undermined by full JAA membership and possibly by EASA, and recommended that the Government should clarify whether EASA would have legal powers to impose its proposed standards. It was disappointing that the Government's response to the report did not answer that point. I hope that, when the Minister replies today, he will say whether EASA will have such powers.
I have several concerns about non-European operators in the air. Responsibility for inspecting foreign-registered aircraft which land in the UK—ramp checks—lies with the Department for the Environment, Transport and the Regions. Only 59 ramp checks were carried out in 1997–98 and 63 in 1998–99. The Government have generously said that the number of ramp checks must be increased and that 200 foreign planes coming into the UK will be checked. Recently, planes landing at Heathrow were found to have insufficient fuel on board, and that is the sort of thing that would be found by a ramp check. However, set against the 1,762,820—nearly 2 million—air transport movements through Britain in 1998, those 200 ramp checks are wildly insufficient. That is a matter of great concern to my constituents in Wiltshire and even more so to people in the capital.
I wrote to the noble Lord Macdonald, who I understand is responsible for transport matters in the other place. It is sad that he cannot answer for transport matters in this

place. It is odd that English transport should be controlled by a Scotsman in the other place. Incidentally, he is the fourth Scotsmen to deal with English transport matters—

Mrs. Dunwoody: I am rather amused that the hon. Gentleman, who occasionally tells us that he is a Scot, should find it so annoying that other Scots have positions of some importance.

Mr. Deputy Speaker: Order. I hope that hon. Members will not start criticising the Scots.

Mr. Gray: You and I, Mr. Deputy Speaker, and other Scots who run this part of England, are none the less elected, in my case by the English and in your case by the Scots. Lord MacDonald is not elected at all and yet, curiously, is pontificating on English matters.
I raised a constituency case with the noble Lord concerning the safety standards of foreign carriers operating into the UK, and he said that civil airlines are required to comply with the "minimum safety standards". We are not asking foreign carriers to aim high and try to do as well as British carriers; we require foreign carriers to comply only with the absolute minimum. That is particularly worrying.
That matter was raised with me by my constituent, Mr. Stokes, of Hullavington. He quoted the worrying statistic that Ryanair, an Irish airline, currently landing in the UK, employs 18 Serbian pilots. It is curious that an Irish airline not governed by our high standards should employ Serbian pilots. That was apparently the case during the Kosovan war when we were at war with Serbia. None the less, we allowed Serbian pilots to land at our airports. That is bizarre and I hope that the Minister will tell us how that can happen and what can be done to prevent it from happening again, perhaps during an even more serious war in the future. The then Under-Secretary of State for the Environment, Transport and the Regions, hon. Member for Hampstead and Highgate (Ms Jackson), wrote to me stating:
there are no legal reasons why these pilots should not be employed in the UK.
When we are at war with Serbia, Serbian pilots should be prevented from operating in the UK. If the Minister cannot answer my questions, perhaps he will consider changing the regulations so that such a situation does not arise again.
The hon. Member for Crewe and Nantwich referred to a number of matters to which the Minister should reply. One concerned the width of the aisle through the forward bulkhead in the Boeing 737. Coming from a vaguely military background, I have always been puzzled why, when soldiers travel by plane—by crab air, as the RAF is called in the Army—they always face the back of the plane because it is safest, yet civilians always face forward. Why is that?
It is important constantly to reiterate that British air travel has the highest standards in the world, and we must keep it that way. Sorting out the botched job of NATS involves a consideration of whether we are lowering standards by palling up with the Europeans on these matters, and a general consideration of what we can do with regard to runway capacity in the south-east. Such considerations are important if we are to continue to be seen as the safest air carriers in the world. My concern is


that the Government's response to our carefully worded and thought through report does not satisfy us on that point. Many will listen to what the Minister says in his reply extremely carefully. The Government's response to the report did not give us such satisfaction, so I hope that the Minister will find it in his heart to do so today.

Mr. Brian H. Donohoe: The hon. Member for North Wiltshire (Mr. Gray) dealt with some matters on which I want to concentrate. However, given the situation, of which he is aware, my speech may have a slightly different slant.
I was pleased to hear what my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) said. With her usual penetrating insight, she focused attention on a significant area of the debate which the Minister must answer this afternoon. The UK has had an excellent aviation safety record to date, but we might have taken it for granted for too long, and public confidence may not be retained.
Hearing the Deputy Prime Minister's welcome statement this week that there is to be an additional £80 billion for transport, the public may wonder why, for only another £1 billion, air traffic control cannot be maintained in the public sector. I wonder whether the public have worked that formula out. We are talking in real terms of only a small amount of money being returned to the Government—a profit of some 7 per cent.—so it is strange that we should be moving down the uncertain road of this public-private partnership.
Like you, Mr. Deputy Speaker, I travel fairly regularly on the shuttle, and you will know that much frustration is caused by the delays at Heathrow on a Monday morning. That it why it is important that we should hear from the Minister this afternoon just when Swanwick will be up and running. More importantly, we need to know when Prestwick will be given the go ahead. Since I entered the House in 1992, there have been many uncertainties about the Prestwick building programme, so one way or the other we need to know when that programme will go ahead. Both sites must become operational at the earliest opportunity.

Ms Sandra Osborne: Does my hon. Friend understand the frustrations of my constituents and the many employees at the Scottish centre at Prestwick about the continuing delays there which started when the previous Government questioned the two-centre strategy and then instituted a botched PFI project? Does he agree that the continuing delays are causing intense frustration and worry in Scotland?

Mr. Donohoe: Yes. My hon. Friend is a great champion of getting that building programme under way. As a neighbouring Member, I receive a great deal of representation from air traffic controllers at Prestwick. They are frustrated because the programme has not gone ahead and is not already in place. Given the amount of time that has elapsed between the announcement, with all its information about the future, it is amazing that, in 1999, as we move into a new millennium, not a single sod of soil has been cut on the site to enable the programme to go ahead.
Another comparison that is made with the proposed public-private partnership for National Air Traffic Services is the privatisation of British Airways and BAA.
Yet there is no comparison between British Airways, which competes with British Midland—and, dare I say it, Ryanair—and air traffic control, a service in which there cannot be competition. Let us hope that there is no competition; clearly, NATS should continue to be a monopoly. It is disgusting that we are considering taking it outside the public sector. My view is based on safety considerations and the public perception of those matters. My hon. Friend the Member for Crewe and Nantwich mentioned the recent accident at Paddington in that context. The public should be accorded the respect that they deserve.

Mr. Tam Dalyell: I endorse my hon. Friend's comments about the mind of the public. Their views are reflected in those of the pilots. On 13 of the past 14 occasions when I travelled between Edinburgh and London, I asked the pilots for their views on the proposals. Every one is unanimously behind the British Air Line Pilots Association and Mr. Chris Darke. They are worried about who is in control when they have to land at the busy airports of Heathrow and Gatwick.

Mr. Donohoe: As usual, my hon. Friend speaks with great knowledge. The Select Committee took evidence from BALPA and we are therefore aware of pilots' anxieties. As a regular traveller on the route that my hon. Friend mentioned, I have been lobbied by pilots on the same subject. However, there will be plenty of opportunities for us to discuss NATS in future. It is only one aspect of air safety, and I want to mention some of the other subjects that the admirable Select Committee report considered.
First, I want to consider establishing an over-arching transport safety authority. Lessons should be learned from accidents that happen in all industries, not only the one that we are considering. We are perhaps better placed to deal with the problems of the virtual airlines, which have already been mentioned. However, it is more important for the industry to have well-qualified and highly motivated staff. I am especially worried about staff shortages in the safety regulation group. I am pleased to note that extra payments will be made to flight operations inspectors. I ask the Government to show similar flexibility in other cases.
The Select Committee was especially worried about the potential shortage of pilots and other staff. A review of air traffic operations took place in 1993. If PPP were introduced, staff shortages, coupled with the new owners' efficiency savings, would be extremely worrying. We must ensure that that does not lead to a drop in standards; standards are everything for the aviation industry.
Previous speeches have covered other subjects, but I want to concentrate on the fact that pilots must maintain United Kingdom standards, and be supported to do that. We welcome the Government's position. The Chicago convention and further testing of the Joint Aviation Authority require further attention in future.
There must be a greater focus on adequate training facilities in the industry. I do not believe that we should leave that to the private sector. The Select Committee concentrated on that. The Government must monitor the provision of facilities and ensure that the industry pays for the necessary facilities to maintain the high quality of services.
The lack of aircraft maintenance engineers is worrying. As an engineer, I know the importance of maintaining planes and all equipment. Evidence to the Select Committee suggested a reduction in the number of maintenance engineers. We welcome the fact that the Government will establish a working group. However, working groups do not reach conclusions as quickly as they might, and the problem requires immediate attention. The Government must ensure that the industry fulfils its responsibilities on aircraft maintenance engineers and training in general.
We must emphasise the quality of air traffic regulation in this country compared with that in Europe. Some anxieties have been expressed about air traffic regulations but, rather than leading to United Kingdom standards dropping to those of some other countries in Europe, the regulations should ensure that standards are maintained and even improved.
Parts of the Government's response to the report have been disappointing. They need to sharpen their responses to the particular anxieties that have been expressed today. I hope that, this afternoon, we will receive some of the answers that we did not get when we presented the report to Ministers.

Mr. Tom Brake: I welcome the opportunity to contribute to the debate. Transport safety is important to the public, especially after the Paddington rail crash. The debate is especially timely in view of the recent publication of the Transport Bill, which provides for the partial privatisation of National Air Traffic Services. The Select Committee has considered that proposal in a separate report. Nevertheless, it would be absurd not to consider public-private partnership in the debate, and many hon. Members have referred to it at length. I shall also comment on it.
The Liberal Democrats remain opposed to selling off NATS. The Select Committee's report and the Government's response contains nothing that convinces us that we should believe otherwise. The report's recommendations reinforce our opinion. Recommendation (h) rightly points to the dangers of continuing delay to the new air traffic control centre at Swanwick. The most important requirement is to ensure that the new centre at Swanwick is made operational without further delay. The Government acknowledged that in their response to the Select Committee, in which they claim that they are committed to opening the new en route centre at Swanwick as soon as possible. My hon. Friend the Member for Bath (Mr. Foster) made that point in a recent debate on transport safety.
In that debate, the Deputy Prime Minister rightly pointed out that there was already an overspend on the project and that Swanwick was more than three years late under the current system. That is entirely true, so it is all the more important to get on with making the centre operational, which is what NATS should be concentrating on.
Perhaps the Minister will tell me whether a major privatisation process and all the uncertainty that that entails will allow the management of NATS to concentrate, with no distractions, on getting Swanwick up

and running at the earliest opportunity. It is worth pointing out that NATS, in a briefing today to my hon. Friend the Member for Bath, said that the whole debate, which has been going on since 1994, has been "very distracting and debilitating". Perhaps the Minister will say that it is having no impact on the delay to Swanwick, but that would contradict what NATS said in the briefing. He must confirm when Swanwick will be up and running. In the Government's response to the Select Committee report he said winter 2001–02 but, in response to my parliamentary question, he said spring 2002. The report and the answer were made at more or less the same time—there were perhaps a couple of weeks between them—so which is it?
The PPP for NATS is wrong at this time, although it is of course wrong in principle, and not only the Liberal Democrats are saying as much. There can be no doubt whatever that the overwhelming majority of staff are opposed to the proposal, as are the pilots, and 116 Labour Members signed an early-day motion in the previous Session confirming that they, too, were opposed or wanted other options to be considered.
What is not in doubt is the need for new infrastructure. As we know, demands on air services are growing and new technology is required. The issue is not whether new technology is needed, but how it should be funded. We have had ample opportunity in the past few weeks to debate the PPP for the tube. I do not intend to dwell on that, but it is clear from the Chancellor's recent pronouncements—one made as recently as yesterday—that his obsession with PPPs is driving this ill-conceived part-privatisation. He has ignored the alternative funding proposals made by us and many others.
Recommendation (g) of the report notes the nervousness of the general aviation or amateur flying community over the NATS sell-off. The Popular Flying Association is concerned that
if NATS becomes a company that has shareholders and which will seek to maximise its profits and pay a return to its shareholders, it will be seeking to find income from any source it can.
The report further states:
The implications for safety would be that either General Aviation pilots would be compressed into a smaller area or General Aviation activities would be compressed into a smaller area, or General Aviation pilots would continue to use the same altitudes as previously, straying into the same airspace as commercial aircraft.
There is concern from other sources.
Few people believe that privatisation, partial or otherwise, is a good idea. Happily, there are alternatives. The service does not need to be part-privatised. Another report by the Select Committee proposed alternatives, not least the successful Canadian model under which funding from private bonds has been found. We think that the Government should be considering that model. The safety of air travellers is paramount and for that reason I extend an offer of assistance to the Minister. If he chooses to abandon the PPP and opts instead for a public corporation model for NATS, he will receive the active support of Liberal Democrat Members in developing those proposals. We would help to facilitate the passage of any such plans through the House.

Mrs. Dunwoody: That is an offer we cannot refuse.

Mr. Brake: Exactly. I thank the hon. Lady for her sedentary intervention.
The Government's proposed PPP for NATS is the key concern in relation to aviation safety, but not the only one, and I shall raise a number of issues. I am particularly concerned about the implications of code sharing for safety standards and it raises issues similar to those that have already been mentioned in respect of virtual airlines. As the Minister will know, Delta Airlines had a code-sharing arrangement with Korean Airlines, which has been abrogated. I understand that the United States Department of Transportation is drafting safety guidelines that will apply to alliances between United States and foreign operators. Perhaps he will answer this question: when a UK airline enters a code-sharing arrangement with a foreign airline, what safety requirements are placed on the foreign operator and are the Government satisfied that the safety regulation group will be able to oversee such airlines to a sufficiently high standard?
Liberal Members believe that the Select Committee's recommendation that a safety regulation group should be incorporated into an independent transport safety authority requires detailed consideration. It could be a means of ensuring that best practice in one transport industry is adopted by another. I am conscious that the Minister will not want to pre-empt the Davis report findings, but can he give a commitment that the Government will tell the House how they intend to proceed as soon as they receive those findings? He might be in a position to make a statement on what progress may have been made by their review of transport safety matters.
As other hon. Members have said, if any issue warrants consideration at European level it is air safety. It is little comfort to British travellers that the British aviation industry has an excellent safety record. If they are landing in another country, our good standards may not ensure safe arrival at their destination. Will the Minister assure the House that the Government will ensure that UK safety standards will not be compromised and that they will work positively with European partners to increase safety standards in Europe so that there is no dumbing down or lowest common denominator safety standard, a prospect referred to by the hon. Member for North Wiltshire (Mr. Gray)?
I represent a Greater London constituency so I have concerns about Heathrow airport. They have been referred to, particularly in relation to Malaysia Airlines aircraft landing when low on fuel. Our report recommends that the Government re-examine whether such aircraft should be allowed to approach Heathrow over central London. Their response was rather brief and seemed to suggest that they had not taken that recommendation on board. Can the Minister enlarge on their response and tell the House whether they have indeed re-examined the matter?
I am also a little perplexed by the Government's response to recommendation (1) of the report, which concerns foreign aircraft inspections. The report recommends a greater number of ramp checks—I note that they have taken that on board—and the introduction of random checks. The Committee stated that other European countries carry out such checks, but the Government responded by saying that the UK would contravene its Chicago convention obligations by introducing such a practice. On that specific and important point, perhaps the Minister will explain whether there is a contradiction and whether European countries are perhaps breaking their obligations.
Staff and training represent a further concern, and other hon. Members have referred to them. I want the Minister to respond to a specific question: will he today report to the House any interim findings of the interdepartmental working group, which was set up on 10 August, and can he give us a date for the delivery of the report?
The final concern to which I shall refer is the millennium, which is only a couple of weeks away. Will the Minister take perhaps the final opportunity to say whether the Department of the Environment, Transport and the Regions or Action 2000 will be issuing last-minute instructions to travellers that will perhaps list airlines about which there are no safety concerns whatever, as well as those about which there remain safety concerns over the millennium bug?
Safety worries relating to the aviation industry are very real, and are likely to increase. I have asked the Minister a number of specific questions; I hope that he will be able to respond to them today, or, failing that, that he will write to me in the near future. The key concern is still the part-privatisation of national air traffic services. I do not believe that there is any appetite for that in the House, in the aviation industry or in the country. The sooner the Government scrap it, the sooner the new Swanwick centre will be up and running, and the sooner we shall be able to build on our excellent safety record.
Finally, I must issue a challenge to the Minister. Can he put his hand on his heart and say that the Government are selling 51 per cent. of air traffic control because that will improve—not just maintain—safety standards?

Mr. Mullin: Yes.

Mr. Brake: The Minister says that he can do that. In his answer to a parliamentary question from me, he listed the arguments for public-private partnership, but the need to improve safety did not feature. He has another opportunity now.
The Minister knows—as, I think, do his Back Benchers—that this is really about money. It is about a smash-and-grab raid by the Treasury. Whether the Chancellor will have £350 million or £15 million in his war chest in return for the sale of NATS, I do not believe that the Minister£either in the Government's response, or here today—will be able to demonstrate that the sale is needed because it is the only way of improving safety in air traffic control. The Government must abandon their plans to privatise air traffic control: that is the one transport U-turn that everyone would welcome.

Mr. George Stevenson: So far, all who have spoken have done two things. First, they have said how important and detailed the report is, and drawn attention to the time and trouble expended by the Committee and everyone else involved, including witnesses. Secondly, they have echoed a view expressed throughout the report, and stressed the high quality of the United Kingdom's aviation safety record. I do not think that that can be repeated too often.
As others have briefly pointed out, the background is an enormous growth in air traffic services. I am told that, in 1989, some 92 million passengers passed through British airports, and that 159 million did so in 1998. That represents an average annual growth of about 8 per cent.,
and none of the evidence received by our Committee suggests that the same rate of growth is unlikely to continue. In many respects, there is a good tale to tell—a tale of which we should be proud. As the report and its recommendations suggest, the challenge is this: how can we at least maintain our record, and, if possible, improve it?
I share the disappointment expressed by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) about the Government's response to a report that issues the challenge to which I have referred, and makes detailed, well-researched, specific recommendations on how it can be met. I want to highlight three points made in the report. The first relates to the safety regulation group, which is part of the Civil Aviation Authority. The report draws attention to a particular aspect of the group's vital activities. Our evidence suggested that, in recent years, it had taken a "hands-on" approach to aviation safety. That means that airlines and operators produce their safety plans and safety operations, and the safety regulation group considers them to establish whether they are adequate.
It could, I suppose, be argued that the process has worked. By definition, we would not have such a good safety record if it had not. So what is the problem? First, it clearly represents a move towards a self-regulatory regime, and that is not the purpose for which the safety regulation group was originally established. Secondly, we should consider the enormous growth in the industry that has already taken place, and the enormous growth that will take place in the future. We should also consider anxieties that have been expressed about virtual airlines. I think I am right in saying that the evidence that we received from the safety regulation group suggested that it was difficult to monitor the activities and safety standards of virtual airlines, because of their fragmented nature.
Given those and many other problems, we must consider seriously whether the hands-off embryonic self-regulatory approach that the safety regulation group seems to have developed over recent years is one on which we can depend for the future. I would feel rather more comfortable if we could be assured that the Government would engage in discussions with the CAA and the safety regulation group to ensure that the right balance was achieved. I would like to be sure that, as the process continues, we shall not lose sight of the concept that the safety regulation group should set standards and make inspections to ensure that they are applied, rather than simply judging whether the operators' plans are adequate. 1 think it essential for my hon. Friend the Minister to reconsider his response to the report's recommendation about the safety regulation group. I feel that it is complacent, and misses the important point that the report was trying to make.
I am also concerned about the relationship between the air accidents investigation branch, the CAA, the safety regulation group and the Government. By definition, the reports of the air accidents investigation branch follow accidents, some of which are tragic; they are therefore that much more important, in terms of the conclusions reached by the branch, and the action that it recommends the CAA and the Government to take to ensure that lessons are learned and such accidents do not occur

again. The evidence we received suggested that recommendations made by the branch some years ago had still not been implemented.
We were worried about the cause of some tragic air accidents, including the infamous Boeing 737 accident, which resulted in many lost lives. Recommendations were made. I understand that there is still uncertainty about the cause and the recommendations; any recommendations that were made have not been implemented. There are other examples of that. Therefore, it is crucial that the issue of CAA involvement in air accidents investigation branch reports and recommendations, and the Government ensuring that the recommendations are acted on, is revisited urgently.
There is some merit in the CAA ensuring—as it does at the moment—that air accidents investigation branch recommendations and reports are made public, but the branch itself should perhaps publish its recommendations. In addition, as a matter of urgency, the Government should ensure that there is minimal delay in branch reports being made public and brought to the attention of Government, and that recommendations are implemented.
The final area to which I shall refer—in many ways, it is crucial to the debate about the future of air safety—is our relationship with European organisations, a matter that has been touched on by other hon. Members.
At the moment, we have the Joint Aviation Authority, which has been described as a club. Twenty-seven or 28 European nations get together, discuss issues and try to come to some conclusions. As the hon. Member for North Wiltshire (Mr. Gray) rightly said, it goes at the pace of the slowest camel in the train. We took evidence that clearly showed that three, four or five years may pass before conclusions are reached.
I know that the Government are worried about that. I suspect that it is one of the reasons why the Minister will say that the Government are in favour of developing the European profile, but we must make the decision making quicker and more efficient. We cannot tolerate inordinate delay in coming to decisions.
When we questioned the safety regulation group on the whole relationship between safety standards and regulations in the UK and what may happen in Europe, we were given assurances that, if there were inordinate delay and the JAA took decisions that reduced UK standards, the group would not hesitate to implement, or to improve, UK standards. That was reassuring, but the proposed European air safety authority is a different animal altogether. The JAA has no legal standing. EASA will be a legal entity. Presumably, therefore, its decisions will have the force of law.
If the safety regulation group is determined to ensure that safety standards in this country are not compromised as a result of the changed European profile, two things will be important. First, when and if EASA is set up as a legal entity and the safety regulation group does not agree fundamentally with a decision, the group will have two options. It can act illegally by doing something else and, as a result, begin to undermine EASA's credibility. We cannot have it both ways.

Mrs. Dunwoody: There is another alternative. The group can be ordered to maintain the compromise standard that is acceptable throughout Europe.

Mr. Stevenson: I am grateful to my hon. Friend for raising that point. It means that I do not have to detain the House with the second option. It is an important point.
The report makes it as clear as we could possibly make it that, if air safety standards in the UK are to be maintained and improved, we cannot tolerate international organisations, with perhaps the best will in the world, taking decisions that we are legally bound to apply, but that dilute those safety standards. We think—the report is clear about it—that the Government should be extremely careful and seek the most concrete assurances before they sign up to EASA.
I make two more quick points in relation to that. First, evidence to the Committee, which came from professionals in the industry, not from politicians, was clear. There is a north-south divide in Europe in relation to safety standards. Generally speaking, the north of Europe has much higher standards than southern Europe.
That leads to my second point. For my sins, I spent 10 years in the European Parliament, so I know a little about how the place works. We have heard the term "negotiation". People say, "Do not worry, we shall negotiate from a position of strength. We shall ensure that our interests are protected," and so on. That is fine. I differ from the hon. Member for North Wiltshire. There is a role to play in international co-ordination and co-operation on air transport. We have to be careful about falling into the trap of taking a little Englander view. By definition, that is the case. It is nonsense to argue differently.

Mr. Gray: The hon. Gentleman is entirely misquoting me. I went to some lengths to say that co-operation was important. We must co-operate with our European partners, but federal integration of the type that is proposed under some of the new bodies is exactly what we do not want.

Mr. Stevenson: I am grateful to the hon. Gentleman for reminding me that he used the word "federal." I do not think that that word is in the report, but it implies that there is some other political motive behind his point. Nevertheless, the point is well taken.
Much can be done through negotiation, but we must never forget that EASA will be subject to qualified majority vote. It will not be a matter of us saying that we will defend our standards when we are outvoted by other people who think that those standards are either not appropriate, or too burdensome. It is an important point.
The negotiation that will go on will be fine in many respects. I have no doubt about that, but we are concerned about the notion that the UK's high safety standards are negotiable. There is a strong argument that, in the public interest, and in the interests of the industry, those high safety standards are, by definition, non-negotiable. Therefore, there is an issue for the Government to consider. If we are entering negotiations, will it be right that our high standards should be subject to such negotiation, with all the potential pitfalls that could ensue?
This is a good and detailed report. It makes some important recommendations. I remain somewhat disappointed about the Government's response, which in some cases is complacent and verges on the sanguine. I hope that, as a result of the debate—I shall listen to the Minister with great interest—we have been able to persuade him and the Government that the report should be taken far more seriously than appears to be the case.

Miss Anne McIntosh: I am delighted to follow the hon. Member for Stoke-on-Trent, South (Mr. Stevenson). A few weeks ago, I had the pleasure of visiting his part of the world for the first time, with a Joint Committee on a Special Procedure.
Partly because my husband works for an international airline, and is therefore a frequent traveller, I believe that aviation safety is an extremely important issue. I place great emphasis on his safety, as I do on that of others who work for his company and of everyone who travels by air.
I welcome the Select Committee report. I am also honoured to serve on the Transport Sub-Committee under the able chairmanship of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). I joined the Committee two weeks before publication of the report—it therefore constituted my first official involvement with the Committee—and there has been a learning curve.
I join the hon. Lady in regretting the rather disappointing, even poor, Government response to the report, and the four-month delay in drafting that response. I agree with the hon. Lady that we must avoid complacency in the aviation industry. The United Kingdom has one of the safest aviation industries in the world, and successive United Kingdom Governments have ensured that we have made some of the world's greatest investments in the industry, both in airport air traffic control and in airlines.
I pay tribute to those who work in the airlines, in the airports and in related industries—such as the Civil Aviation Authority and National Air Traffic Services—who have worked consistently towards achieving extremely high safety levels in the United Kingdom aviation industry. We have been able to achieve those high safety levels because of the contributions made by our pilots, engineers and air traffic controllers.
Like the hon. Member for Stoke-on-Trent, South, I was a Member of the European Parliament for 10 years. Never in my wildest dreams did I imagine that, on returning to the United Kingdom and taking my seat in this place, I would have the pleasure of serving with him. I do not think that, 15 years ago, either of us realised that we would again end up at the same place at the same time.
In playing its current role, the Joint Aviation Authority is handicapped by not having legal authority to impose agreed standards. I therefore view establishment of the European Aviation Safety Authority more positively than some other hon. Members may do.
The problem is one not only of setting European air safety standards, but of implementing agreed standards. As the Government's response notes, the Civil Aviation Authority has always played, and—rightly—will continue to play, a leading role in developing European standards in the Joint Aviation Authority.
Accident rates in Europe are among the world's lowest, and—as the Government's response states categorically—there is no evidence that harmonised safety standards have reduced United Kingdom safety levels.
I should like to make a confession: as a rapporteur of the Transport Committee of the European Parliament, I was involved in the creation of the European Aviation Safety Authority. The fact that any single organisation would lack teeth in implementing safety standards was the precise issue leading to the creation of the pan-European Aviation Safety Authority. Therefore, our objectives in


establishing the authority do not warrant the suspicions expressed today by some hon. Members. As the Government's response explained—I rarely agree with the Government's memorandums, and am therefore slightly alarmed to agree with their response to this report—the objective is to give EASA legal powers to impose the standards that it adopts.
The Civil Aviation Authority has assiduously imposed the standards set in the United Kingdom, and we must ensure that all our European partners aspire to equally high standards. Third-country carriers seeking to use European Union airports and air space also must match those high standards. Therefore, EASA can only add to the greater collective value of air safety across Europe.

Mr. Gray: Does my hon. Friend agree that the important thing is that all airlines and aircraft that use British air space and British airports should conform to the highest possible standards—which are those established by the Civil Aviation Authority, which is answerable to this place? The standards applying in Paris, Brussels or Hamburg are a matter for the national Governments of those places, not for this place.

Miss McIntosh: I do not disagree with my hon. Friend, but simply say—I realise that it is a radical view to take on either side of the House—that, although we pride ourselves on our high safety standards, we should not accept that passengers travelling on other European carriers, or on international carriers seeking to land in the United Kingdom or elsewhere in Europe, should have lesser safety standards.
An even more radical suggestion was made in the European Parliament: that, to ensure parliamentary accountability, a Member of the European Parliament should be on EASA's board, and that there should be annual reports from EASA to the European Parliament. The Minister, and perhaps other hon. Members, might like to comment on those suggestions.

Mrs. Dunwoody: As the hon. Lady is informed on the aviation industry, she will know that the type of airlines that we are talking about already comply with international standards, and that, almost without exception, those airlines support the International Civil Aviation Organisation, in which there are agreed common standards. Therefore, the issue is not one of not accepting international standards. Unfortunately, the history of our involvement in European institutions shows that, rather than harmonising upwards, we frequently harmonise downwards.

Miss McIntosh: My experience is perhaps more positive than the hon. Lady's. I shall return in a moment to the issue of third-country carriers. As she will remember, the Committee considered that issue—which I hope the Minister will address in his reply.
I welcome the Government's commitment to perform more ramp checks on foreign aircraft; their response commits them to performing 200 ramp checks annually. Although I appreciate that the Government are able to act only in response to specific concerns, I regret that random checks are deemed not to be compatible with our

obligations under the Chicago convention. I believe that only with random checks and the element of surprise will we be able to impose the highest possible standard of inspections.
I invite the Minister to take this opportunity to update the House on the point just made by the hon. Member for Crewe and Nantwich, on arrangements to travel into the United Kingdom from certain third countries at the millennium—which is only two weeks away. We should certainly like to send a positive message of safety to all those who use that type of transportation service over the holidays, and this debate might provide the Minister with an opportune moment to update us on the issue. I believe that officials in his Department said that the permits of four countries might be lifted at the millennium, which is fast approaching.
I share the concern expressed by the Select Committee, in its report, and by people outside the House, of a potential pilot shortage. United Kingdom safety standards cannot be compromised, and we should have sufficient pride in our civil aviation industry to attract a steady stream of recruits.
I have similar concerns about the recruitment and training of engineers and air traffic controllers. I hope that the Minister will deal in his reply with those concerns, as expressed in the Select Committee report.
During my time in the European Parliament, as Member of the European Parliament for Essex North and Suffolk South, I had the privilege of representing Stanstead airport. I therefore appreciate that, in many areas surrounding airports—such as, particularly, north Essex and south Suffolk, where air traffic and approach congestion are increasing—local people are increasingly concerned about stacking over airports at peak times. I should like the Government to address that, because it is difficult for busy airports to balance their development with the concerns of those who live nearby.
The cost of smoke hoods and the training of passengers in their use are also important issues. Many passengers do not fly regularly or do not use the same type of aircraft every time. The Government response covered the point adequately. It said:
Earlier research indicated that the delays in evacuation caused by untrained passengers trying to don smokehoods would cause a greater loss of life from fire than the number saved by reduced inhalation of toxic fumes.
I do not want to be alarmist, but we have to balance safety against the fact that many domestic and European internal flights last less than 40 or 50 minutes. In many cases, there is not enough time to train passengers—including me; I am not always an ideal passenger—to use the complicated smoke hoods. The cost of fitting smoke hoods for every passenger could put low-cost carriers such as Ryanair and easyJet and possibly also Go and Buzz out of operation.
We would all like air rage to be addressed, particularly by discouraging potentially disruptive passengers. There is the growing problem of passengers who refuse to switch off their mobile phones and laptop computers. It is incumbent on the Government to impress on such passengers that those are serious offences that could be life threatening to a plane load of passengers. Those offences must be tackled seriously and stiff penalties must be imposed.
My final point is about military aircraft using uncontrolled airspace. That is of particular concern to me, because my constituency covers RAF Leeming,


RAF Linton and Dishforth. I note that the Government intend to install a collision warning system for the ground attack Tornado GR4 aircraft. I should like a commitment from the Minister that the same system will be extended to the Eurofighter when it comes into operation in 2002, which will use bases such as RAF Leeming.

Dr. Jenny Tonge: I join the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) in congratulating our air traffic controllers. We are grateful for the astonishing job that they do. This country has an enviable air safety record at the moment. However, I should like to address the factors behind my constituents' genuine concerns about air safety. We are constantly reminded of the issue in Richmond Park.
After the Southall rail crash, when safety was questioned, Mr. Justice Scott Baker said:
There may be a conflict between profit and safety.
Many comments and comparisons have been made since then about the effects of privatisation on safety factors. Despite assurances about responsibility for safety being separated from the privatised NATS, people are very worried. That is a prime concern for my constituency, which lies under the two approach flight paths to Heathrow. We cannot forget about air safety. When aircraft pass over the area every one or two minutes during the day—despite runway alternation, thousands of people are affected every day and every night—conversations stop, teachers stop teaching and at night sleepers awake. There is a constant reminder of what might happen.
We have heard about aircraft flying with near-empty tanks. I got an unsatisfactory response when I questioned the Department of the Environment, Transport and the Regions about that after one incident. I was told that it was not this country's responsibility. That is extraordinary, when the aircraft are flying over our people.
We also hear about near misses in the sky. We are reassured that there are many more aeroplanes in the sky now but that the number of near misses has not risen in proportion, but they are certainly well publicised. People are very conscious of them and the number is rising each year, even if the proportion is not. The Minister shakes his head, but paragraph 21 of the Select Committee's report shows how numbers have risen.
Over the past 12 months, we have had some frightening attacks from the air in my constituency. In December last year, the body of a boy fell into a—thankfully derelict—site in Mortlake from an Air India flight. The boy had stowed away in the wheel housing and fell on a gas works next to a school. The Civil Aviation Authority carried out a full investigation after the inquest, but the only result was that the airline was asked to make tighter checks before its planes took off. That is not much comfort to my constituents when they remember that bodies have fallen out of the air.
On 12 November this year, a block of brownish ice fell through the roof of the school that was missed by the body 12 months ago. I shall not use unparliamentary language to describe what that brown ice really was, but the airline described it as
frozen effluent created by seepage through the aircraft structures.
Whatever it was, it was very nasty. Luckily, it came through the roof of the school and not into the playground where the children were playing. The CAA promised

another full investigation, but we have not heard any more about it. I was told on the telephone only two days ago that one of my constituents, Mr. Malcolm Welchman, was narrowly missed when walking along the pavement by another block of brown ice falling out of the sky. The incident has been reported to the CAA, which is trying to track the aircraft from which it came.
The situation is worrying. The Minister might investigate and name the airlines involved in such outrages. Why are such aircraft that come in to land at our airports not severely fined? Money from those fines should go on environmental projects or further safety measures. Eventually, somebody will be seriously injured.
The number of aircraft coming in over my constituency is another subject of concern. In 1993, the British Airports Authority forecast that, if terminal 5 went ahead, Heathrow would be able to take 420,000 air traffic movements every year. By 1996, there were 423,000 air traffic movements.

Mr. Gerald Howarth: Does the hon. Lady accept that the number of aircraft movements is not limited solely by terminal capacity, but—much more importantly—by runway capacity? It is an extraordinary achievement of British airports to have produced so many more movements with the same amount of runway. Terminal buildings are not the problem.

Dr. Tonge: That point is made to me often. The danger is that, because we were promised no further development at Heathrow after terminal 4 and we now face the prospect of terminal 5, we know also that it will not be long before there could be a third runway. That is one of the problems for my constituents—promises and forecasts never come true, and are always overturned by events.
By 1997, the number of air traffic movements had increased. In 1998-99, we are already seeing in the region of 425,000 to 430,000 air traffic movements a year. Even without the new terminal or further development at Heathrow, estimates are already way above predictions. It is no wonder my constituents do not believe a word that BAA says. It is all lies to them.
My constituents do not believe very much of what is told them by the Government either when it comes to air safety and what will happen in and around Heathrow. We know that BAA will go on increasing air traffic movements with or without terminal 5. Will air traffic control cope in the future? Has that been considered? Will a privatised industry cope? Will it all have to cope on a shoestring until we start having collisions and crashes and the ensuing inquiries come up with the same remarks as were made after the Southall train disaster?
I cannot resist one last point. Can the Minister tell me when the inspector's report after the inquiry into terminal 5 will be published? Will the Government accept all the report's recommendations when it is published?

Mr. Tony McWalter: It is with some trepidation that I rise to speak, as I am not a member of the august Select Committee. However, the nub of the issue is something on which I have a little expertise. During this year, I have been privileged to be a member of the parliamentary armed forces scheme. As a result,
I have witnessed at first hand many of the air traffic control systems around various forces and places in this country. In addition, I was, for a time, a director of computing in a university, and I wish to talk explicitly about the information technology side of the debate.
By instinct, I am strongly in favour of keeping the air traffic control system within the public sector. One feels strongly about it because its record and professionalism have been so good. People have referred a great deal to the achievements of air traffic controllers. Having witnessed them at first hand, I have to say that I am somewhat worried about the quality of the instruments that they need to use to carry out their job.
It is true that air traffic controllers have fantastic expertise and ability to cope, but increasing air traffic year on year means that their task gets more and more difficult, and the ancient instruments that they use to monitor air traffic movements become more and more strained.
The Government are right to be concerned about trying to find a way forward that will meet that severe challenge. Even if we have a system that has been incredibly safe for 20 years, if we keep increasing the capacity, there comes a point at which it will no longer be safe.
With a database that has an order of complexity of 100, some people think that one can perform much the same operations to cover a database with an order of complexity of 120 or 200. However, there comes a point at which the extra demands being made require one completely to redesign that database, and to think again about how one copes with the extra pressures being put on it. That is true even in elementary arithmetic. Perhaps most of us can multiply two double-digit numbers, but most will find it difficult to multiply two quadruple-digit numbers. That small increased complexity taxes us to our limits.
In computing terms, that is what is happening with air traffic control. We are faced with the need for a radically new system. The Liberal Democrats say that there is a strong need for new infrastructure. I am not worried about that so much as the expertise available to us in IT to cope with the transition. Change we must, and all those locked into the current system—be they air traffic controllers or pilots—are worried about the change. They know how complicated it has become; they know how big Topsy has grown.
Yet we must find a way of managing that change while keeping the outstanding safety with which we have managed change over the past couple of decades. Doing that will require new resources. I am old-fashioned enough to think that, if that were the only issue, air traffic control should remain in the public sector and we should find those resources. However, I am much more worried about the problem of expertise.
North of the border, people talked this week about the number of civil servants with extreme expertise in fisheries, but little expertise in IT. That is also true south of the border, and in the British Isles in general. The public sector in general lacks the IT expertise that is needed to make the transition. That is due partly to history, partly to the way in which we recruit civil servants, and partly to pay rates. In my constituency—a high-tech constituency—people get £50,000, £60,000 or £100,000 a year for doing such jobs. It would be difficult

to earn that much in any job in the public sector. Such people accordingly migrate towards the Microsofts and IBMs of the private sector.
As the expertise is increasingly in the private sector, it is right that, whatever else happens in the transition, the Government should lock themselves on to that expertise and try to find a way of marrying the professionalism, commitment and dedication of people such as our air traffic controllers to the extraordinary expertise that will be needed in IT to manage the revolution effectively.
That is why, despite the fact that a number of my esteemed colleagues signed an early-day motion in the previous Session lamenting the Government's stance on the matter, I found myself unable to sign it. I think that something like a public-private partnership, using the ideas about which I have talked, is needed. That does not mean privatisation, losing control or marginalising the commitment to public service that has rightly characterised the service for so long. The expertise will help us to achieve the results that we seek. We should also give recognition to the employees. The resulting structure would allow us to manage the difficult and dangerous transition in the most effective way possible.

Mrs. Dunwoody: The hazard of that argument is that the whole Swanwick exercise has been undertaken by private sector companies from the beginning. If there was a problem, it was not with the expertise in the civil service but with the project management and the computer companies. The civil service already has an extremely useful unit in Norwich, with enormous computer expertise, that is not used by Departments.

Mr. McWalter: That argument is not compelling because the expertise held in the private sector does not always make it through into public contracts. Under the previous Government, a computer company—I will not name it, although I know that I can do so here—sold inferior products to the public sector and did not provide adequate support. In my view, that was because there was insufficient expertise in the civil service to secure the right contracts to hold the private companies accountable.
There are clearly different ways of slicing the top off that egg, but, in my view, the failures show the lack of expertise in the public sector. I am saying not that the whole public sector has a lamentable lack of expertise in information technology—that would not be true—but that the kind of expertise needed to make the transition effective needs to be tapped into in an appropriate way. I hope that, between us, we can sort out the arguments to the benefit of air safety, air passengers and our transport system.

Mr. Gerald Howarth: Like the hon. Member for Hemel Hempstead (Mr. McWalter), I am not a member of the Select Committee, but I am delighted to be able to contribute to our debate and to have heard the very interesting contributions that have been made. I apologise to the Chairman of the Committee, the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), for not having been here for her speech; I was engaged at another institution on the Strand. I echo what my hon. Friend the Member for Vale of York (Miss McIntosh) said: she has brought great distinction to her chairmanship.
I declare more than a passing interest, as I have been an aviator for the best part of 33 years—I held a pilot's licence before I held a licence to drive a motor car—and I have the privilege of representing Farnborough, which is the birthplace of British aviation. In Farnborough, we have the aerodrome—the site of the first manned flight in the United Kingdom, when Samuel Cody took off on 16 October 1908—the Defence Evaluation and Research Agency headquarters, British Aerospace headquarters and the air accidents investigation branch.
I want to single out the air accidents investigation branch and its head, Ken Smart, for the phenomenal work that is done there. I am sure that members of the Committee will be aware of it, but I am not sure how many members of the public appreciate the fantastic resource of skill and forensic science that we have in the AAIB. 1 have seen the remains of the Lockerbie PanAm 747 there. Mr. Smart showed me how the branch had determined how that aeroplane met its fate. The fact that it could do that is a tribute to the way in which it works.
There are two branches: the engineers, who are all pilots, and the pilots, who are all engineers. They cross-fertilise in a very impressive operation. To a pilot, the institution is a little grim, because it is something of a morgue, with the remains of crashed aeroplanes; but I pay tribute to it none the less.
I echo what the hon. Member for Stoke-on-Trent, South (Mr. Stevenson) said about the high aviation safety standards that we enjoy. There has been universal recognition in this debate that the United Kingdom is extremely well served in that respect. We are an air-minded country and a world leader in many aspects of aviation, and it should come as no surprise to the House or the wider public that we have cause to be proud of our air safety record.
The air traffic controllers, especially in the London airports region, have performed their task with immense skill, despite the huge increase in traffic. I sought to make that point to the hon. Member for Richmond Park (Dr. Tonge). The House debated 10 years ago whether Heathrow should have its number of traffic movements raised to 275,000 and whether it was possible to move any more traffic there. We were told that it was not. In fact—her constituents are right to be concerned about it—there has been a 30 to 40 per cent. increase, which is again a tribute to the skills of the air traffic controllers.
The hon. Lady talked about the number of reported airproxes—they used to be called near misses, but we now have an airprox board. In 1998, the number of risk-bearing airprox incidents involving public transport flights per 100,000 flying hours was 1.2, compared with 2.37 in 1997 and 2.87 in 1996. That suggests that there has been an actual reduction, not simply a proportional reduction.

Dr. Tonge: The hon. Gentleman is comparing one year with a trend that was otherwise going up.

Mr. Howarth: I freely confess that I was using only the figures for the past three years, and I do not suggest that we should be complacent. There is certainly no room for complacency. We continue to enjoy high standards of air safety only because there is no complacency. Heaven forbid that there should be any in the House. It is vital that anyone with any interest in aviation should recognise that the number 1, 2 and 3 priorities are safety, safety and safety.
We should none the less take encouragement from the picture that the figures give us of the state of play at the moment. In fairness, we should not stir up unnecessary concerns among the public, especially those who live near airports. The figures show that the situation is not getting worse.

Dr. Tonge: We need some clarification. The proportion of near misses to flights has been going down, which is excellent, but there has still been an overall increase in the number of near misses per year. That is what worries my constituents.

Mr. Howarth: I was seeking to show that there cannot have been an actual increase in the number. A reduction to 1.2 from 2.37 per 100,000 flying hours in 1997 suggests that the number has halved, and I am not sure that the number of flying hours will have gone up; but let us leave that point now.
The hon. Member for Hemel Hempstead made an interesting point. I had the opportunity last year of flying on the Civil Aviation Authority's BAC 1-11 development aeroplane. Incidentally, I take the opportunity of this debate to say to Sir Malcolm Field that I hope that he retains that aeroplane in the CAA's control, because it does valuable work. I saw an exciting new development in operation on the aeroplane that would enable the pilot to use a rollerball—of the type with which we are all familiar from computers—to change the track on his navigational display, either because of bad weather or for another reason, and to press a button to transmit the new track to the air traffic controllers. Using the software, they could then establish whether the track were safe or conflicted with other traffic. If the track were safe, they could immediately authorise the pilot to adopt the new track. He would then press a button and the new track would be fed into the autopilot and the aeroplane would fly safely. The hon. Member for Hemel Hempstead may be reassured on that point.
I represent Farnborough as part of my constituency, and concerns have rightly been expressed to me about the proposals for new developments there, following the sale of the airfield by the Ministry of Defence to a company called TAG. Several years ago, the previous Government suggested that Farnborough should be the main business and general aviation airfield for London and the south-east of England, a decision that this Government also supported. I, too, endorse that decision, although my constituents are concerned about the number of movements, and safety is an important factor to them. I hope that the Minister will be able to assist Rushmore borough council in coming to an agreement on the planning application by TAG that will enable the airfield to continue to operate and, therefore, to continue to be the home of the world-famous Farnborough international air show.
The Committee made some important points about general aviation. I shall not rehearse the debate that we had recently on the air navigation order, in which the Minister mounted a stout defence against my concerns about general aviation. Paragraph 54 of the Committee's report states:
We recommend that the Government should take steps to ensure that access to training and practice for General Aviation pilots is not unduly limited, either by cost or by planning constraints. We believe


that all pilots should be given incentives to undergo training and, accordingly, recommend that VAT should not be charged for appropriate training courses.
I strongly endorse that recommendation and urge the Minister to adopt it. There is no doubt, as the Popular Flying Association has made clear, that the more pilots fly, the safer they are likely to be. The higher the cost of private flying is driven, the less likely people will be to keep their licences current—hence the more dangerous they become when they fly. Perhaps the Minister could also persuade the Chancellor to remove the tax on Avgas fuel, which is one of the high-cost elements of private flying.
The hon. Member for Hemel Hempstead made a good point about the privatisation of NATS, and I agree with him. I have constituents who are air traffic controllers and I know that they have concerns. Safety is of course of paramount importance, but the experience of privatisation of BA and the BAA has not resulted in any diminution in safety. The PPP proposed for NATS is also unlikely to reduce air safety. I have spoken to Bill Semple and visited Swanwick and the London air traffic control centre at West Drayton, and I cannot believe that the professional people I met would do anything other than put safety at the top of their priorities.
My hon. Friend the Member for North Essex (Mr. Jenkin), who speaks for the Opposition on transport, made an important speech recently on the issue of Eurocontrol. I am concerned that the European Union is seeking a seat on the Eurocontrol board, because it is made up of sovereign nations and I suspect that the EU will simply supplant the individual nation states.
I am also concerned about the possible consequences for slot allocation in this country and for our negotiations with the United States of America about transatlantic access to gateway points. The hon. Member for Stoke-on-Trent, South was right to point out the dangers of qualified majority voting if it were to be applied to the proposed new European aviation safety authority. Several hon. Members, including my hon. Friend the Member for North Wiltshire (Mr. Gray), have expressed concerns about that proposal; I echo them and hope that the Minister will take them into account.

Mr. Tam Dalyell: I shall be succinct, because we want to hear from my hon. Friend the Under-Secretary of State for the Environment, Transport and the Regions. As a non-member of the Committee, I wish to thank all my parliamentary colleagues who spend a lot of time on Select Committees and do valuable work on our behalf. I thank the Chairman and the members of the Committee.
I wish to restate the direct question put by the hon. Member for Vale of York (Miss McIntosh), because it bears repetition. How will integration with military flights be achieved under the Government's proposals? There may be a very good answer, but the fact remains that, not so many days ago, a very ugly incident occurred over Edinburgh airport, when a low-flying military aircraft on its approach suddenly had to gain flight because a bird apparently got into one of its engines. That created a situation that posed definite danger to a British Midland

passenger aircraft. I contacted the Ministry of Defence to ask it for the details, and I hope that my hon. Friend the Minister will do the same and answer, by letter or in his speech in reply to the debate if possible, the question about integration with military flying.
We all reflect our pasts, and part of my past was being seconded to P&O and the British India Steam Navigation Company. It was an absolute rule for anybody working on a ship that one obeyed the captain. Therefore, I believe that the pilots have a special position on all the proposals. Many Scottish Members fly every week to be here and some of us have taken the trouble to talk to the pilots in whose hands we and our fellow passengers place ourselves. On 13 occasions out of 14 recently—the other time the pilot was understandably busy with training—I have asked the pilots what they think of the proposals. I have asked whether they support Chris Darke and the British Air Line Pilots Association, or whether it is an instance of a professional association arguing a case. I can faithfully report to the House that every one of those pilots, with varying degrees of vehemence, said that they did not like the proposals as they understood them.
It may be that my right hon. Friend the Deputy Prime Minister has a good case, and I am not ill-disposed towards him because he, the Chairman of the Committee and I were all part of the bureau of the Socialist group of the European Parliament some 21 years ago. I therefore have great good will towards my right hon. Friend, but we are entitled to ask before we pledge support for the proposals how it is that the Government have been unable to persuade the pilots. The pilots make the precise point that it is all right to fly into busy airports such as Edinburgh and Glasgow, but that it is an entirely different matter to fly into the world's fourth busiest airport, Gatwick, or the world's busiest airport, Heathrow. They say that they want to be sure that there is unified control. If the Government fail to persuade the pilots on this matter, I fear that they will have to do without my vote.

Mr. Robert Syms: We have had a good debate and the Select Committee should be congratulated on the work that it has done on the report, which covers a subject that is of growing importance to all our constituents. I particularly thank my hon. Friends for their contributions to the debate; my hon. Friend the Member for North Wiltshire (Mr. Gray) made some very goods points as did my hon. Friend the Member for Vale of York (Miss McIntosh), with whom I slightly disagree over some issues. My hon. Friend the Member for Aldershot (Mr. Howarth) is a pilot and represents a constituency with strong aviation interests and he always makes good points in the Chamber.
Many Labour Back Benchers also made sensible and measured proposals. When the House debates a Select Committee or a factual report on a matter that is of such concern to our constituents, it is sometimes at its best. I hope that the Minister will reply to many of the good and telling questions that Labour Members asked.
As was said earlier, the number of passengers passing through British airspace has increased from 93.2 million in 1988 to 159 million in 1998. In the same period, the number of commercial flights has increased from 1,135,264 in 1988 to 1,762,870 in 1998. That is an increase of 55.3 per cent. It is forecast that air traffic will increase by 50 per cent. over the next 15 years. The arrival of low-cost aviation has made air travel a possibility for all.
Heathrow has 98 movements per hour—that is a take-off or landing every 36.7 seconds. It is a tribute to the CAA that the tremendous increase in travel has been accompanied by improvements in safety standards. Flying in a commercial aircraft, particularly one registered in the United Kingdom, is a safe way to travel. However, the Select Committee has raised several concerns that we need to address today.
What first concerned me was that the Committee felt that much of the oral evidence that it had received was complacent and tended to emphasise the current good safety record rather than examining the challenges ahead. It is vital that the safety culture in the aviation industry is paramount and that the Government ensure that any proposals to change the existing system are based on research.
The safety regulation group of the CAA faces challenges both from deregulation and the arrival of low-cost airlines. I was particularly interested in the Committee's description of a virtual airline, a subject that several hon. Members, including the hon. Member for Stoke-on-Trent, South (Mr. Stevenson), mentioned. That is a fragmented airline, which perhaps leases aircraft and engines from outside the UK. In the past, the safety regulation group has been forced, simply through pressure of work, to pursue a less proactive role, leaving more of the checks to individual airlines. With well-known carriers, that may not be a problem but, with the arrival of new airlines, we need to ensure that they are properly supervised.
The Committee has identified a number of problems that I shall touch on, although with such a comprehensive report, it would be unfair to Members wishing to speak if I dwelt on all of them for too long. Airprox incidents— the number of risk-bearing near misses involving public transport flights—have decreased. In 1998, there were 1.2 for every 100,000 flying hours compared with 2.07 in 1997 and 2.87 in 1996.
Instances of overload have more than doubled. The number of periods when traffic controllers felt that volume was too great to guarantee safety was 49 in 1998–99 compared with 24 in the previous 12 months and 16 in 1996–97. National Air Traffic Services is finding handling the massive increases in air traffic increasingly difficult, with ageing equipment, under-investment and pressure from airlines to reduce delays. A senior official of NATS said earlier this year:
We can cope with 3 per cent. annual growth but 7 per cent. and higher is really stretching things".
The Parliamentary Advisory Council for Transport Safety has highlighted to me the conflict between safety and capacity. There are concerns about the recent reduction in the vortex rate at Heathrow from 3 to 2.5 miles and whether that rate may be eroded further. The issue was raised with the Select Committee by the Guild of Air Traffic Control Officers.
Another key concern are developments in Europe. We are members of the JAA, which was established in 1970. It includes regulating authorities from 27 European states, including the CAA. The JAA operates as a club and its decisions are not legally binding on its members. It is fair to say that there was criticism from witnesses to the Committee about those arrangements, which clearly need improving. However, the Committee was also clearly unenthusiastic about the Government's preferred solution of developing EASA to replace it.
Conservative Members believe in the nation state and in co-operation on an international intergovernmental level. We therefore oppose EASA being turned from an international organisation into one controlled by the European Union. We also resist the proposals now emanating from Mr. Prodi and the Commission with its "15 states, one sky" policy to take over the Eurocontrol organisation. That proposal was discussed last week by Transport Ministers in Brussels. Unfortunately, the Government, with their usual craven attitude, are falling over themselves to sign up to obligations that will result in EU involvement in the control of our airspace.
Conservatives fully support co-operation with other countries for better management of air traffic control. For many years, Britain has been a leading member of Eurocontrol—the European body that covers air traffic control in not just EU states but national regional air traffic control systems across the continent. There are huge air traffic problems in continental Europe. Other countries do not manage their systems well and cause European travellers horrendous delays. Those problems can be solved by continued co-operation rather than integration. They are not a pretext for the EU to muscle in and grab a whole new area of legal control. That is why we would have vetoed those latest moves.
Labour supports the proposal that the EU should itself become a member of Eurocontrol. That means that the EU will not only take over member states' negotiations in Eurocontrol, but will automatically acquire the power to make law and regulations about the airspace of the member states. The EU is due to join Eurocontrol on 27 January next year and that is a massive increase in EU legal competence.
The Government need to answer some crucial questions. What are the overwhelming reasons for Britain to give up control of our skies? What can the EU achieve for air traffic management in Europe in Eurocontrol which will not be achieved for Eurocontrol's non-EU members? If other EU members states are determined to go ahead, why should the UK not have an opt-out?
We have the best air traffic control in Europe, if not the world. It is hard to see what Britain will gain from this arrangement. We must not fall for the line that European integration will mean that the other EU countries will change their ways and adopt ours. The common fisheries policy and the common agricultural policy have surely taught us that. Several hon. Members, including the hon. Members for Crewe and Nantwich (Mrs. Dunwoody) and for Stoke-on-Trent, South have made that point. We need services to be improved not a levelling down.
Most important are the defence and security consequences. The EU is not a member of NATO, and many EU countries are non-NATO members. What are the defence and security implications of a non-NATO body partly controlled by non-NATO countries acquiring the supreme authority over UK airspace?
We are in favour of co-operation. We are full and active members of Eurocontrol as an international organisation; however, we are against unnecessary expansion of EU power for its own sake. It is plain that this proposal is really about European federalism and that Labour is selling out our vital national interests.
NATS has been the focus of the debate. Many hon. Members have expressed their concern about the Government's public-private partnership proposals. I do
not believe that safety issues will be affected by the change in status of NATS, but Government hesitation in the past two years or so may have damaged short-term investment. The Government's PPP is a convoluted compromise that has delayed the sale of NATS for the past couple of years. To quote my hon. Friend the Member for North Essex (Mr. Jenkin), the shadow Transport Minister:
While the Government were searching for a way to spin this privatisation in the media and the Department was missing slots in the legislative timetable, Britain's air traffic system has been starved of capital investment and has had investment plans shelved".
Conservative Members want a simple flotation with a golden share to provide for permanent UK control.
Another interesting point, raised by my hon. Friend the Member for North Wiltshire, concerned how little money would be raised by the sale of NATS. The explanatory note to the Transport Bill states:
Income from the partial sale of NATS to a strategic partner could raise in the region of £350 million. Against that, NATS has outstanding loans of around £300 million which will need to be settled … the total cost of establishing a public-private partnership … will be approximately £35 million".
That means that only £15 million will be raised from the sale. I was interested in the speech by my hon. Friend the Member for North Wiltshire, and in the Minister's intervention. I hope that the Minister will enlighten the House about how the Government will get more than the figure that they put in that explanatory note.
If the Government are serious about a PPP, they need investment from the private sector. The Opposition caution the Minister against accepting bids from foreign companies that are wholly or partially state owned. For instance, Thompson CSF of France is 40 per cent. owned by the state.
There is a real problem with NATS. All other air traffic control systems in the world are owned by the public sector. Many of the potential bidders for NATS, therefore, could be other states' air traffic control organisations. I hope that the Minister will take this opportunity to rule out the possibility that the air traffic systems of neighbouring states such as southern Ireland might be allowed to bid for a share of NATS.
Whenever there is a debate about air safety or NATS, the subject of Swanwick comes up, and several hon. Members mentioned it today. I hope that the Minister will reassure the House that the opening date for Swanwick remains spring 2002, as he said in a recent written answer.
Several hon. Members also mentioned the delay in setting up the oceanic flight data processing centre at Prestwick. Will the Minister tell us when the contract will be signed, if it has not been signed already? What is the target date for the centre's opening?
A recurring theme in the Select Committee report was the problem of staff shortages. Staffing and training were among the key issues in the Committee's proposals. The safety regulation group has problems filling vacancies—five of its 45 posts remain vacant—and, as is the case with almost all such organisations, it faces stiff competition from the private sector over the recruitment

of suitable staff. There is an argument that the staff of many of the bodies mentioned in the debate should enjoy better pay and conditions. That would ensure that we can maintain and keep the first-rate people needed to give confidence in air safety.
Mention was made earlier of the air accidents investigation branch of the Department of Trade and Industry, which has also suffered from staff shortages. The hon. Member for Crewe and Nantwich said that she hoped that the Minister would state that those shortages have been made good. However, a real problem of staff retention exists in those services.
The report states that, until 15 years ago, 70 per cent. of those working as pilots or in engineering posts were ex-military. Clearly, given the way in which the world is going, the problem of filling those posts will get worse unless the Government—and the private sector—offer a lot more in terms of training to ensure that we get people of the right calibre.
I was also interested in the Committee's plea that English be pushed as the language of the air, and made the standard for air-ground communication. In some respects, I understand other countries' opposition to that proposal, but it is an important point and I hope that the Government acknowledge it.
My hon. Friend the Member for North Wiltshire raised the problem of runway capacity in the south-east. The Government's response seemed to suggest that they did not consider that there was any particular problem. However, in the document entitled "A New Deal for Transport: Better for Everyone" published in July 1998, the Government said that a White Paper would be produced setting out airport policy for the next 30 years. I know that a possible factor in the delay to that White Paper has been the Heathrow terminal 5 inquiry. As the hon. Member for Richmond Park (Dr. Tonge) noted, it would be helpful if the Minister could give the House some idea of when we will hear the terminal 5 inquiry date, and of when we can expect a White Paper setting out a sensible airport policy for the future.
The Government have taken on board some of the Select Committee's recommendations, but I was worried to hear the hon. Member for Crewe and Nantwich say that the tone and quality of the Government's response had been poor, and the hon. Member for Stoke-on-Trent, South described his disappointment at the way in which some of the recommendations had been received. Those two hon. Members are senior and respected figures, so it is fair to say that there has not been great joy and happiness at the Government's response. However, I know that, if the Government do not respond satisfactorily in the short term, hon. Members will come back to the House to ensure that they take the Select Committee report more seriously.
We welcome the aviation safety report by the Select Committee. However, we remain concerned about greater EU involvement in our skies and about some of the Government's rather convoluted plans for a PPP for NATS. However, this has been a good debate, on a topic that is close to the hearts of the many of our constituents who travel far and wide. I look forward to the Minister's response.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Chris Mullin): As the hon. Member for Poole (Mr. Syms) said, this has been a good debate. If I may say so, we have been discussing a good report. Although I know that my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) will not be deflected by flattery, I pay tribute to her long interest in these matters. As I shall probably have to repeat several times in my speech, I can assure her that we take the report's recommendations very seriously.
It will not be possible for me to deal with all the issues raised this afternoon. There are rather a lot of them: some had only a tangential relevance to the subject but, happily, most were relevant. I shall do my best, but I shall be glad to write to hon. Members if I miss out any of the main points.
The allegation running through the debate has been that the Government are in some way complacent about air safety. I entirely refute that. We are not content with the status quo. We do not believe that everything is perfect. I shall not even go so far as to say that our air safety arrangements are the best in the world. I shall say only that they are among the best in the world, as the House will accept.
During my years in the House, I have heard many of our institutions—police, judges, soldiers and so on—described as the best in the world, most often by Conservative Members. That radiates an air of complacency that I have no wish to adopt, so I shall confine myself to saying that our air safety record is among the best in the world. Work goes on continuously to make sure that we maintain that record.
One requirement to being taken seriously in this matter is to ensure that we do not react in a knee-jerk fashion to tragedies. When a tragedy happens, everyone make an instant analysis of the circumstances, and experiences a personal gut feeling about what was wrong or about what should have happened. However, the benefit of hindsight is that it often shows that initial reactions were incorrect. It is vital, therefore, when dealing with important issues of safety, to reflect maturely and undertake proper research and analysis before reaching conclusions.
Some recommendations might even have an adverse affect on safety. For example, the use of smoke hoods was proposed soon after the Manchester accident, and subsequently. However, it has been suggested that smoke hoods could impede evacuation: if so, they would not necessarily be desirable.
Many hon. Members have spoken about air traffic control and about the Government's plans in that respect. Other opportunities will arise to debate those matters—the next coming on Monday, so I shall make only a few general points on the matter.
Many hon. Members have asked when we expect Swanwick to open. I can confirm that it is on target, which is more than can be said about the arrangements that we inherited. It is expected to open in spring 2002. What is most important is not to predict in advance the day or week when it will open, but to get it right. Stringent tests and training will take place between now and then to make sure that we get it right. Thus far, I am glad to say, opening is on target.
We inherited a considerable mess at Prestwick and we are doing our best to put it right. That has involved unravelling some arrangements. If ever there was a case for getting some private sector skills into project management, it is the project management at Prestwick. It is anticipated that Prestwick should be ready by the winter of 2005-06, but I hope that no one will attempt to hold me to a particular day or week. Once again it is important to get it right.
I repeat a point that Ministers and everyone concerned with safety regulations has made at every opportunity—that aviation safety is, and will continue to be, paramount. That theme runs through all our plans for the future of air traffic control. We intend to separate, and keep separate, safety regulation from operations.
I think that it was my hon. Friend the Member for Cunninghame, South (Mr. Donohoe)—forgive me if I am wrong—who made a comparison with Rai1track. There is none to be made. One of the big mistakes about Rai1track is that it was left with some safety responsibilities. It is a cardinal rule of effective safety procedure that safety regulation is kept separate from operations. That happens now and will be written into our arrangements for a public-private partnership of air traffic control. Far from undermining safety, we shall enhance safety arrangements. We are in the process of talking to all interested parties, including air traffic control and pilot representatives. We are taking seriously all their suggestions—they have made several constructive suggestions—for improving safety arrangements. For example, we hope to include on the board a director who has specific responsibility for safety. That will be an improvement.

Mr. Brake: I thank the Minister for giving way and perhaps he was going to come to this point. Can he explain why he did not include improved safety in his written answer which listed arguments for PPP? Was that simply an oversight or what?

Mr. Mullin: With the greatest respect, that is a silly point.

Mr. Brake: It is a serious point.

Mr. Mullin: Our position, which I stated at the outset and which I now repeat, is that safety is paramount. The safety arrangements that exist now are extremely good, as everyone recognises. We intend to maintain them when the PPP is up and running. In addition, we are willing to listen to any sensible suggestions, from whatever source, to enhance safety. We have had some sensible suggestions and we are taking them seriously. Indeed, I expect to implement some of them. I make the point again that the PPP of air traffic control will, if anything, enhance safety arrangements.
My hon. Friend the Member for Cunninghame, South mentioned that there was a public perception that the sale of part of air traffic control would undermine safety. Like many public perceptions, it is wrong. It is the job of all responsible people to put right such misconceptions. Indeed, those misconceptions are shared by a number of hon. Members, and it is the job of the Government and those concerned with safety regulation and of the management of air traffic control to make sure that the correct perception and correct facts are given to the public.
It is a little-known fact—people are constantly surprised by it, although one or two hon. Members are obviously aware of it because they referred to it—that, at many private airports—there is a long list of them which I do not have with me—air traffic control is already in private hands and has been for many years. It is regulated in the same way as air traffic control elsewhere and is working extremely effectively. Anyone who alleges that selling a stake in air traffic control to the private sector will make arrangements less safe must confront the fact that, already in a large number of airports, air traffic control is privately managed.
Ms Margaret Moran (Luton, South): Is my hon. Friend aware that London Luton airport, which I am proud to represent, is one of those 18 airports that is not controlled by NATS and is already a public private partnership? It is one of the fastest growing United Kingdom airports. The Queen recently opened its second terminal. It employs an increasing number of my constituents. Does my hon. Friend agree that it is important to maintain the confidence of air passengers who go through London Luton for the sake of the industry and our local economies?

Mr. Mullin: That is true of Luton and of others. A list has now mysteriously appeared in front of me. The other day I had the pleasure of visiting East Midlands airport. It is quite a large privately owned airport where air traffic control has been privately operated for many years and is working perfectly satisfactorily. There are at least 18 others, including Belfast, Blackpool, Bristol, Bournemouth, Coventry, Exeter, Guernsey, Humberside, Isle of Man, Jersey, London Luton, Liverpool, Leeds Bradford, Newcastle, Prestwick and Teesside. I know that some of those are small and I do not try to draw any too large conclusions, but some are considerable operations and have been working satisfactorily. In addition, the CAA already regulates the BAA and airlines that are in private hands. The CAA already has a lot of experience of regulating the private sector, so we are not breaking any new ground.

Mrs. Dunwoody: I hope that my hon. Friend will not misunderstand me when I say that to suggest that the operation of any one of his list of worthy and developing airports is equivalent to air traffic control over London is rather embarrassing. I hope that he will not persist.

Mr. Mullin: I am not suggesting that, of course. I said that I was not seeking to draw significant conclusions from it. But it is wrong to allege that the principle is somehow impossible, and that putting air traffic control into the private sector—albeit with state regulation, which is what we intend— introduces a huge new problem that has never before been confronted. That is all that I am saying—I put it no more strongly than that.

Mr. Gray: The Minister said a moment ago that the public-private partnership would, if anything, enhance safety. Is he suggesting that safety is less than 100 per cent? Presumably, he is. Secondly, will he tell us in precise detail how the proposed PPP will enhance safety?

Mr. Mullin: I am not alleging that safety is anything less than 100 per cent. at present. I am simply saying that

we are in the market for any suggestions to enhance safety. A number of constructive suggestions have already come from interested parties. I mentioned one, which the hon. Gentleman may have missed—to have a director on the board of the new company with specific responsibility for safety. We will consider any other suggestions seriously.
My hon. Friend the Member for Linlithgow (Mr. Dalyell) asked me about integration with military flights. Our proposals for air traffic control have been discussed with the Ministry of Defence, which is satisfied with the arrangements. We intend to ensure that the present excellent arrangements for co-operation between the military and civil air traffic control will be maintained. We shall lay an obligation on the National Air Traffic Services through its licence. NATS is negotiating a detailed contract for the delivery of joint and integrated services. I can give an assurance that the public-private partnership will have no adverse effect on the arrangements.

Miss McIntosh: The Minister answered the question by the hon. Member for Linlithgow (Mr. Dalyell). Could he also put my mind at rest that the Eurofighter will be fitted with the collision warning system that the Tornado has when it comes on stream in 2002?

Mr. Mullin: I am afraid that I cannot comment on that. If a note about that reaches me during the course of the debate, I shall certainly convey its contents. If not, I shall write to the hon. Lady. I assume that she would not want me to reply off the top off my head.
The hon. Member for Hemel Hempstead (Mr. McWalter) made a number of sensible points. He referred to the huge pressure that will undoubtedly continue to be placed on those who work in the aviation industry by the exponential growth of the demand for air travel. There has been a 7 per cent. increase in recent years. He was right to say that it will put a great strain on the technology and on the personnel responsible for operating the technology. That is why we have to invest in new technology worth £1 billion. That is one reason—only one—why we are setting up a public-private partnership. It will require a radically new system. Incidentally, the technology is destined to go on changing—even when we have achieved the changes that will be made at Swanwick and Prestwick, that will not be the end of the matter. There are other, much larger, changes in the pipeline, and we have to be ready to meet them. That is another reason why we need to bring in the private sector.
The hon. Member for North Wiltshire (Mr. Gray) said that there was some confusion about the amount of money that we hoped to raise from the sale. He had, as he said, a cast-iron alibi for his non-attendance at the Select Committee the other day. The same alibi does not apply to the other two Conservative Members who were absent.

Miss McIntosh: On a point of order, Mr. Deputy Speaker. As the Chairman of the Select Committee knows only too well, I was seconded to serve by special request on the special procedures committee considering the Tunstall northern bypass Stoke-on-Trent compulsory


purchase order, and I have been doing that for six hours a day, four days a week, for the past three weeks. I was relieved from that duty only—

Mr. Deputy Speaker (Mr. Michael Lord): Order. That is a very interesting explanation for the hon. Lady's absence from the Committee, but it is hardly a point of order for the Chair.

Mr. Mullin: The hon. Lady has my deepest sympathies. I do not seek to make too much of this point, except to say that I was, in my previous incarnation, a Chairman of a Select Committee, and one or two Conservative Members, such as the hon. Member for Aldershot (Mr. Howarth) take them very seriously. But some do not, and I was disappointed when I appeared before the Environment, Transport and Regional Affairs Committee the other day that not a single Conservative Member was present. It goes beyond disappointment and becomes galling when the very same Conservative Members crop up in the Chamber a few days later and demand the answers to questions that have been given elsewhere.

Mrs. Dunwoody: I am happy to support the normal exchange of insults. However, all the Conservative members of the Select Committee had legitimate reasons not to attend. I hope that the Minister will not use my Committee as an excuse for this kind of exchange.

Mr. Mullin: I am grateful for that information. I think that we should now move on and keep within the spirit of the debate.

Mr. Gerald Howarth: Will the Minister give way?

Mr. Mullin: No, I must move on, because I have only 10 minutes or so left, and hon. Members want replies to their questions.
The hon. Member for North Wiltshire said that there was some confusion about how much money will be raised. No one can predict with certainty how much money will be raised from any sale of public assets. However, the £350 million estimated as the possible income from the sale of the 46 per cent. stake is exclusive of the debt. I hope that that is helpful.
The hon. Members for Poole, for Aldershot and for North Wiltshire referred to problems with the European Union. We all know the difficulties that some Conservative Members have with foreigners in general and the EU in particular. I have no intention of intruding on private grief, but a serious point was made, which was repeated by my hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson). Signing up to any future arrangements with Europe must not become an opportunity to dilute this country's very high standards. I entirely accept that. We will not agree to anything that undermines rather than raises standards.
Directives from Europe sometimes raise rather than lower standards. For example, environmental standards in this country used often to be lamentable, and we must be grateful to the EU for some of the measures that it forced the previous Government to adopt—albeit with some reluctance—and that we have adopted with rather more enthusiasm.
A point was made about the inspection of foreign aircraft, which was addressed to some extent in the Government's response to the report. We have doubled the budget for foreign aircraft inspections. We take the matter seriously, and hon. Members were right to raise it. We have agreed to an intensive programme of checks with the CAA. In the six months from 1 April, 56 checks were completed, which compares with 63 in the previous 12 months. The number of inspections is expected to accelerate over the winter months.
The safety regulation group works on the basis that hired foreign aircraft are expected to have safety levels equivalent to those in the United Kingdom. Rather than make general, untargeted checks, the group tends to concentrate on areas in which there is cause for concern.

Mr. Howarth: Will the Minister give way?

Mr. Mullin: The hon. Gentleman will forgive me if I do not, as I have only five minutes left and have been generous in giving way.
My hon. Friend the Member for Crewe and Nantwich was among hon. Members who referred to the allegation that a plane attempted to land at Heathrow with very little fuel in its tanks. It has not been possible to verify the allegations. The airline mentioned was Malaysia Airlines. Departmental officials met representatives of the airline to review its fuel policy, which the CAA judged to be in line with international requirements. In May, it was agreed that the airline should provide my Department with weekly fuel reports for all its aircraft, and it has done so.
The hon. Member for Richmond Park (Dr. Tonge) referred to the millennium.

Dr. Tonge: indicated dissent.

Mr. Mullin: The hon. Lady shakes her head at me. Someone asked me to refer to it.

Mr. Brake: indicated assent.

Mr. Mullin: I apologise to the hon. Member for Carshalton and Wallington (Mr. Brake), who asked me to confirm that we are millennium compliant. The UK industry is compliant. As regards foreign airlines, two—Gulf Air and Southern Aviation of Zambia—have yet to supply appropriate information. Those airlines have been advised that their permits will be suspended over the millennium if satisfactory information is not forthcoming.
Several hon. Members, including my hon. Friend the Member for Cunninghame, South, referred to concerns about the shortage of staff in the industry and training. Following publication of the Select Committee's report, an interdepartmental working group was established to consider what role the Government might play in supporting efforts to tackle the shortage of aircraft maintenance engineers, which we all agree is serious. The group has met three times—most recently on 13 December.
The hon. Member for Vale of York (Miss McIntosh) asked about air rage incidents. The Government have set up a working group on disruptive passengers. Our consciousness of this problem is relatively new, and we need to collect information on the scale of the problem so that we may analyse it. The CAA has been collecting data for six months, and I expect to receive an analysis of the figures early next year. I do not want to jump the gun until the information is before me.
The hon. Member for Richmond Park referred to two extremely disturbing incidents that occurred over her constituency. I recall reading about those incidents in the newspapers at the time. Given what happened, I entirely understand the terms in which she expressed her concern on her constituents' behalf. Thankfully such incidents are extremely rare, although I appreciate that that is no consolation to anyone who happened to be involved. It is not always possible to identify the aircraft concerned, although it was possible in one of the two cases mentioned by the hon. Lady. The CAA works with all UK airlines to make sure that their aircraft are properly maintained and to enforce mandatory modifications to waste systems where necessary.
Terminal 5 was raised by the hon. Member for Richmond Park and several other hon. Members. The inspector completed his inquiries in March. He estimates that it will take him two years to write the report. It will arrive at my Department, therefore, in 2001. The hon. Lady asked whether the Government would accept its recommendations. It is normal practice to wait for a report before deciding whether to accept it. The most important thing is to get it right.
I repeat that I am conscious that I have not managed to address all the points raised in the debate, although I hope the House will concede that I have dealt with several. I refute the suggestion—

Question deferred, pursuant to paragraphs (4) and (5) of Standing Order No. 54 (Consideration of estimates) and Sessional Order of 25 October 1999 and resolution [29 November].

ESTIMATES DAY

[1ST ALLOTTED DAY, 2ND PART]

Class XIII, Vote 1

Scotland Office

[Relevant documents: First Report from the Scottish Affairs Committee, Session 1998–99, Inward/Outward Investment in Scotland, HC 84, as it relates to the Estimate, and the response of the Government and the Scottish Executive thereto, HC 119 of Session 1999–2000; Departments of the Secretary of State for Scotland and the Forestry Commission Departmental Report 1999, Cm.4215.]

Motion made, and Question proposed,

That a sum, not exceeding £5,810,419,000, be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charge for the year ending on 31st March 2001 for expenditure by the Scotland Office on administrative costs and operational costs; electoral publicity; the Parliamentary Boundary Commission for Scotland; other devolution costs, including the panel to oversee the cross-party electoral expenditure agreement and on a grant to the Scottish Consolidated Fund.—[Mrs. Anne McGuire.]

Mr. David Marshall: This is a unique debate. The report of the Select Committee on Scottish Affairs on inward-outward investment in

Scotland, which was printed on 24 June, exactly seven days before the Scottish Parliament came into operation, is the first report by a departmental Select Committee on one of the devolved areas of the United Kingdom to be debated on the Floor of the House.
The debate is also unique because it enables us to consider not only the response to our report by the UK Government, but the response of the Scottish Executive, both of which documents were ordered to be printed only yesterday and have been available only since 11 am today.
There is one more unique feature, inasmuch as we can also consider, and make references to, the memorandum of understanding and supplementary agreements between the United Kingdom Government, Scottish Ministers and the Cabinet of the National Assembly for Wales, which was presented to Parliament by the Lord Chancellor in October, and the subsequent concordat between the Scottish Executive and the Department of Trade and Industry. Those are extremely important documents for the future of inward investment.
As a member of the Liaison Committee, I am grateful to my colleagues on the Committee for recommending the estimate for debate today. I am grateful also to all the members of the Select Committee on Scottish Affairs representing all four parties, and to the Committee staff for all the hard work that went into the conduct of the inquiry and the compilation of the report. I thank our three specialist advisers, Professors Neil Hood and Stephen Young of Strathclyde university and Mr. Alf Young of The Herald.
Thanks are also due to all those who gave oral evidence to the Committee, and to all the individuals and organisations who submitted written memorandums or who participated in our informal visits in Scotland, Northern Ireland, the Republic of Ireland and the United States.
Our report is published in three volumes. Its recommendations were agreed by all four parties represented on the Committee.
I know that many of my hon. Friends and colleagues on the Opposition Benches want to participate in the debate, which is restricted to two hours. I shall therefore be as brief as possible, but a number of points must be made.
I am pleased that my right hon. Friend the Secretary of State has chosen to respond to the debate. As it progresses, I am confident that it will demonstrate the wisdom of the House in maintaining Select Committees such as ours to consider the vital aspects of reserved powers as they relate to matters such as those that we are discussing today, especially the roles of the Department of Trade and Industry and the Foreign and Commonwealth Office, as well as scrutinising the work of the Scotland Office. I am sure that my right hon. Friend welcomes that, just as he welcomes appearing before the Select Committee—at least, I think that he does.
The Committee's inquiry was a follow-up to a previous Committee inquiry in 1979–80 Session, when my right hon. Friend the Member for Glasgow, Anniesland (Mr. Dewar), now Scotland's First Minister, was its Chairman. This time, however, we added outward investment to the terms of reference. The Committee considered it important to revisit the report of almost 20 years to see what, if anything, had changed and what


progress, if any, had been made. It carried out that inquiry simultaneously with its inquiry into tourism. We were all impressed by the number of similarities between the two.
Although the majority of our 10 conclusions and recommendations relate to matters now devolved to the Scottish Parliament, there are important policy areas that are reserved to the UK Government, such as international relations and trading agreements, which have a vital influence on the operation of agencies such as Locate in Scotland and Scottish Trade International. I referred earlier to the roles of the DTI and the Foreign and Commonwealth Office, which are paramount in respect of both those bodies.
Despite devolution, many of the factors affecting the climate for inward investment are reserved—for example, designation of assisted areas, taxation, employment legislation, air transport liberalisation and, most important, the promotion of the UK as a whole to foreign investors.
Earlier, I referred to the memorandum of understanding and the concordats. It would have been useful for the Committee to have had those during the course of its inquiries, but it was not to be. None the less, our report is relevant. The memorandum and concordats set out common UK guidelines and consultation arrangements in respect of co-ordination of European policy issues, on financial assistance to industry, international relations and statistics.
The concordat on financial assistance to industry provides for consultation between the interested parties in each particular case before offers are made to large mobile investments where there is an interest in more than one part of the UK, where it is proposed to breach agreed financial limits, and where relocation from one part of the UK to another is involved. No doubt, other hon. Members will have something to say on some of those points.
The arrangements will be overseen by representatives of the UK Government and devolved Administrations, and will facilitate the exchange of information on financial assistance between both Administrations. Hopefully, those concordats create a level playing field. They will be essential in resolving any conflict that may arise in future, especially in view of the increased competition between the regional development agencies in England and their Scottish and Welsh counterparts.
The Committee was impressed by the professionalism of Locate in Scotland and the high regard in which it was held by everyone, including its competitors. Regardless of the future of Scottish Enterprise, I hope that Locate in Scotland will continue and that it will be adequately funded. That is essential to meet the ever-increasing worldwide competition for whatever inward investment projects there are to be won.
I welcome the general tenor of the Government's response to our report and their agreement with most of our findings. I especially welcome the apparent good will and co-operation between the Secretary of State's office and that of the Scottish Executive, and the desire to work together for the benefit of Scotland. [Interruption.] The hon. Member for Beaconsfield (Mr. Grieve) may laugh, but he should not believe everything that he reads in the press. The good will is there and the report proves that, particularly the responses from the Government and the Scottish Executive.
That bodes well for the Chancellor's most welcome announcement about the establishment of joint action committees and for the Select Committee's desire to work closely with the Scottish Parliament's social inclusion committee on our inquiry into poverty in Scotland.
I also welcome the Scottish Executive's response. They do not agree with some of the Committee's findings, but they accept and welcome others. In general, they accept that our report was on the right lines and appear to be moving towards making the changes that we suggested. It is always interesting to note the way in which movement is described, which in this case would appear to suggest that it was always intended, regardless of any Select Committee inquiry.
I am deeply disappointed at the Scottish Executive's response on transport issues in paragraph 5. All the evidence given to us highlighted the need for the completion of the last six miles of the M74 in Glasgow, much of it in my constituency. For economic, environmental and social reasons, that should have been the number 1 priority in the roads programme in Scotland. It would protect many existing jobs, open up many hundreds, if not more than a thousand, acres of derelict land for development, and create the potential for several thousand new jobs, as well as removing a malignant eyesore on the surface of Glasgow. It would relieve pressure on the Kingston bridge and reduce congestion and pollution in the city centre, resulting in huge environmental improvements. It would also reduce road accidents, especially for children and old people, especially, again, in my constituency due to the high volumes of through traffic which really should not be there and would not be there if the M74 were completed.
The Scottish Executive has suggested that the local authorities should take the project forward themselves, but that inevitably means road tolls, which would defeat the whole purpose, would add substantial cost to industry and would definitely not be an incentive to inward investment.
Equally, the UK Government need to ensure that the north of England above Birmingham, Scotland and Northern Ireland benefit from good rail and road connections to their major markets, especially in respect of perishable products and products with a short shelf life. We should not forget that the A75 from Gretna to Stranraer is Northern Ireland's main link with Europe.
We are familiar with recent reports, which highlighted the north-south and east-west divides in unemployment, poverty and health. Unfortunately, for reasons that other Labour Members understand only too well, my constituency is at the top of the list, closely followed by most of the other Glasgow constituencies. It is therefore incredible that the Glasgow development agency, the Glasgow Alliance—I confess to being a board member—and Glasgow city council did not make submissions to the Select Committee, despite being told about our inquiry. That is unacceptable, given that Glasgow lost the equivalent of Ravenscraig almost every year for almost 20 years until 1997, and that inward investment to Glasgow almost never meant manufacturing jobs but instead service sector jobs. Those bodies should have made an input into the inquiry, and must accept the blame for not getting their act together and doing so. I make no apology for publicly criticising them. I hope that they will learn from their mistake and do their utmost on behalf of the city.
Since 1997, Labour's record in attracting inward investment to Scotland has been outstanding. From May 1997 to date, inward investment has amounted to more than £2 billion and an estimated 30,000 jobs. That success is due to economic growth and the stable economy that the Government established, and to Labour ending the Tory years of boom and bust and 18 wasted years for Scotland. It is also due to the partnership between the United Kingdom Government, the Scottish Executive and various agencies, and to devolving decision making to local levels. Devolution will enable Scotland to continue attracting record rates of investment. The nationalists would put all that at risk by divorcing Scotland from the rest of the United Kingdom.

Mr. Dominic Grieve: I do not belittle the success of the past two years—although not of the past year—in attracting inward investment to Scotland. In the past year, inward investment has decreased. Statistics clearly show that the years 1991 to 1997 constituted a record period of investment and exponential growth. That happened under a Conservative Government.

Mr. Marshall: if the hon. Gentleman knew anything about Scotland, he would hesitate to point out any possible deficiencies in a period of two years when, for 18 years, the people of Scotland suffered at the hands of his Government.
The nationalists would put the success of the past two and a half years at risk by divorcing Scotland from the rest of the United Kingdom and cutting off Scottish business men from their biggest single market. Divorce can be costly.
The report acknowledged the need to attract high-tech, highly skilled research and development and added-value jobs, but we also appreciate the need to attract any sort of job. A job is a job, especially for someone who is desperate to get one, as most unemployed people in Scotland are. I warmly welcome the Government's measures such as the new deal, priority for education and training, the national minimum wage and investment in people. They will help to equip the people of Scotland to maintain and improve its attractiveness as a major destination for inward investment, thus helping to ensure and contribute to its future prosperity. If our Select Committee inquiry and report have also helped, even in a small way, they will have been worth while.

Mr. Michael Moore: It is a great pleasure to follow the hon. Member for Glasgow, Shettleston (Mr. Marshall), on whose Select Committee I served for the first two and a half years of the Parliament. The inquiry was especially important, and I was pleased to sign up to the report at its conclusion.
Economic development in Scotland, as well as in the whole of the United Kingdom, has always been a key point of political debate and, as the exchanges across the Floor of the House have shown, inward investment is a key aspect of that debate. In its inquiry, the Committee sought to strip away some of the myths that have undoubtedly grown up around sensitive issues such as

inward investment and tried to get to the core of the arguments: whether inward investment is a good thing; whether Scotland has become over-dependent on it; and whether we can expect to sustain the quality and nature of the investment that we enjoy. A number of those themes were usefully explored and I want to highlight in particular the fact that the nature of investment and the types of future direct foreign investment that we may hope to attract to Scotland will change. The assembly operations that have been a feature of inward investment over the past 20 years will decline in significance over the next 10 or 20 years and, notwithstanding the comment of the hon. Member for Shettleston that a job is a job, the nature and availability of some of those jobs will certainly change.
The location of the investment in Scotland has also caused great concern and great argument. We have different perspectives because we represent different parts of the country, but I agree with the hon. Gentleman that, at times, it has seemed as though the inward investment that we have enjoyed has been focused on particular areas. Although Glasgow may have been badly neglected, those of us who represent rural parts of Scotland feel that that is the case for our areas as well.
The world economy is changing, we are losing some of our old industries and Scotland's economic shape is different from that at the beginning of the 1980s, when a previous Select Committee considered this issue. One of the most encouraging aspects of our inquiry was the fact that many of the lessons and warning signals that we were told about were actively being tackled by Locate in Scotland. Like many other members of the Committee, I pay tribute to the hard work that it does around the world and the extremely high success rate that it has achieved over many years. The highlight in that respect is the Project Alba development and the idea that Scotland can be at the forefront of the very industries—

Mr. Grieve: I am most grateful to the hon. Gentleman for giving way. He congratulated Locate in Scotland and I heartily endorse that but, in view of the comments made by the hon. Member for Glasgow, Shettleston (Mr. Marshall), does he agree with the statistics provided by it showing that the highest level of planned investment ever recorded in Scotland—£3.1216 billion£was made in 1996-97?

Mr. Moore: I have no desire at all to enter into a sterile party political debate; I want to focus on these different and dynamic types of inward investment. I spent the first few minutes of my speech explaining that the nature of inward investment in Scotland is changing and one year's statistics are irrelevant two years down the line. I repeat the invitation made by the hon. Member for Shettleston: the hon. Member for Beaconsfield (Mr. Grieve) should visit Scotland and see these places for himself.
The Committee's report referred to the first-class support that exists, but I want to focus briefly on a couple of themes before discussing an issue that is of particular concern to me and to my constituents—it lies at the heart of some of the remaining problems that we have with inward investment. I have touched briefly on the idea that the rural parts of Scotland have traditionally lost out, although I acknowledge the efforts of then Scottish Office and, in particular, the Minister of State, Scotland Office to respond to the difficulties in the Borders over the past


18 months to two years. A rural unit was established in Locate in Scotland, but my concern is that, because it has only a couple of people, it will be hard pressed to tackle the issues seriously unless it comes under the new Scottish Executive arrangements. It must be able to attract significant and realistic resources for the next few years.
When we spoke to the professionals in the United Kingdom, when we were in the United States and when we met Locate in Scotland officials, we were told time and again that it would not matter what we did to point people in a particular direction. Ultimately, companies would decide for themselves where they would go, and would be influenced by the existing criteria and what was available to people in the part of the world that was involved. Such companies would have a number of requirements, but transport links and the transport infrastructure in a given area would rank high in their list of priorities. Those of us who represent the more rural parts of Scotland are very conscious of the fact that that immediately disadvantages us.

Mr. Martin O'Neill: Is it not the case that an area that is not close to one of the new towns will also be denied access to potential investment? Part of the "cluster syndrome" is geographical, in that it focuses on new towns. My constituency includes Clackmannanshire, which is surrounded by about three new towns, and which is also a black hole down which a good deal of investment seems to disappear. The investment goes elsewhere, and I think that the Borders suffers from the same problem.

Mr. Moore: The hon. Gentleman has made a valid point. There are a number of reasons why inward investors are attracted to particular areas, including tax regimes and the available incentives. There is also the question of numbers, to which I shall return in due course. Like the hon. Member for Shettleston, I am glad that the Secretary of State will respond to the debate. I urge him to use his influence, and his co-ordinating and championing roles, to ensure that transport links within Scotland, and between Scotland and the rest of the United Kingdom, are not neglected, and are developed further.
The main point that I want to make relates to the sad case of Viasystems. I refer hon. Members to paragraph 47 of the report, which gives a brief resume of some of the difficulties faced by my constituencies in the light of that case. The loss of 1,000 jobs from the Viasystems site has been the worst single industrial disaster in the Borders in 30 years. As paragraph 47 of the report makes clear, the issues at stake with those job losses lie at the heart of the debate on whether inward investment has been good for Scotland, and whether competition between different parts of the United Kingdom has always been handled in the most positive and constructive manner.
Viasystems was the final incarnation of the idea of a company that was indigenous, in the Borders, and built up from scratch over 30 years. When it was taken over by what I can only politely describe as a bunch of unscrupulous American corporate financiers, it was clear that they intended to close down the sites on the Borders, and to move both jobs and contracts to other parts of the United Kingdom.
At an early stage, what concerned us most was the fact that Viasystems had also taken on ownership of

International Systems Ltd. in north Tyneside, just across the border. It had received a Government grant of £12 million. The project to build the facility and recruit people to do jobs was incomplete at the time when Viasystems was acquired, which allowed it to make serious strategic decisions about the way in which it would organise its business in future. Viasystems was provided with a state-of-the-art facility in an area that was increasingly concentrating its resources and was very capital intensive, while just up the road there was older equipment, and no hope of competing in terms of the economies of scale.
It was with some nervousness that those of us in the Borders learned of the strategic vision presented to the backers in the United States. We learned that Viasystems wanted to control the world market in printed circuit boards. We may all have our views about people who set out to dominate the world. It often ends in tears, and many of them have been shed in my part of the world.
Early in 1998, Viasystems announced a series of poor results. It clearly overestimated its ability to acquire and integrate new facilities successfully. It was not helped by a world downturn. We were concerned. My hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) accompanied me to meetings to discuss the poor results and the threat of redundancies, talk of which was beginning.
Information began to trickle out from management, unions and employees not only that wholesale redundancies were in prospect, but that, early in 1998, several contracts were already being passed to north Tyneside. Expertise was being shipped out, at a cost to people trained to do highly technical and specialist work that had previously been done in the Borders.
On 19 May 1998, I wrote to the Minister of State, the hon. Member for Cunninghame, North (Mr. Wilson). I commented in the letter:
There can be little doubt that business is being diverted from plants such as Selkirk and Galashiels to maximise the efficiency of the new site.
Early on, we were giving warnings and alerting Government to the fact that there was a serious problem.
Later that summer, we had further bad news. We had already lost 200 or 300 jobs and we began to hear rumours that the sites might be closed in their entirety. With my hon. Friend the Member for Roxburgh and Berwickshire, I led a delegation to St. Louis, Missouri, the location of Viasystems worldwide headquarters. We had assistance from unions, the local enterprise company and the local council. We went there in the hope of finding out what Viasystems had in store for us. Our anxiety was simply that, with the facility in north Tyneside, it was going to be able to close our local factories.
Before we went, we had a meeting with Lord MacDonald of Tradeston, the Minister with responsibility for trade and industry at the Scotland Office. I have subsequently been able to get hold of the Scotland Office minutes for that meeting, which confirms my recollection of the occurrence.
I do wish to refer to the civil servant who was talking at the time by name—I pay tribute to the civil servants,
who tried hard to work with us to find a solution—but he said at the meeting:
The factory was still being kitted out and built up to full production levels"—
this was in August 1998—
but, again, the payment of grant would be dependent on both the company's ability to prove that products within the North of England were not simply being substituted for those previously produced in the Scottish Borders, nor were redundancies taking place in Scotland at the same time as government grant was being paid out in England. There had to be a clear definition that these were new lines of work, and it would be the DTI's responsibility to check carefully that this was the case. The Scottish Office would be liaising closely with the DTI to ensure that this condition was fully met.
At that point, we felt that we had at least some support and that there was at least some hope of ensuring that the corporation would not abuse the inward investment rules to ensure advantage for one part of the country over another. Sadly, as many hon. Members will be aware, our trip to St. Louis was not successful and, ultimately, the decision was taken to close those factories.
At that point, I began to call for a public inquiry, so that we could learn some lessons from what had been a devastating time in the Borders, the scars of which are still evident to anyone who visits the area. On different occasions, I requested public inquiries. The right hon. Member for Glasgow, Anniesland (Mr. Dewar), now Scottish First Minister, rebuffed those and said that nothing had been revealed at internal inquiries.
I wrote to the Secretary of State for Trade and Industry requesting that he carry out an inquiry and make the findings public. I got a response from the then Minister for Small Firms, Trade and Industry, the hon. Member for North Swindon (Mr. Wills). He said:
I can assure you that the grant offered by DTI for the plant in the North East stands independently of any transfers of work from existing facilities in the UK".
That immediately contradicts the assurance that we had been given only months before at the Scottish Office meeting.
In the same letter, the then Trade and Industry Minister commented:
Our monitoring of the project will ensure that the new jobs are created in accordance with the offer and that we do not pay for work simply transferred from the Borders.
I tell the Secretary of State and other hon. Members that no one in the Borders believes that that investigation has been done, and no one accepts that the jobs in the north Tyneside plant have been created other than at the expense of the Borders.
Most recently, we started to believe that we had hit our head against a brick wall for the final time. On 7 April 1999, the right hon. Member for Anniesland wrote to me and said:
payment of that grant by DTI has been carefully monitored to ensure that it is not being used to assist the transfer of work from the Borders to Newcastle.
He again rejected the call for a public inquiry.
There has, however, been a further piece of correspondence—and perhaps devolution has taken its toll. Ultimately, we have had a letter from the Scottish

Executive's Minister for Enterprise and Lifelong Learning—the hon. Member for Central Fife (Mr. McLeish)—who recently wrote:
I can confirm there is no condition attached to the grant precluding workers from any particular area taking jobs created on the Viasystems (Tyneside) site. Equally, the monitoring of the grant does not require a check on the previous employment of any of the workers.
All that correspondence, and all the notes of meetings that we have obtained, point to one fact: whatever has happened in the Scottish Office—now the Scottish Executive and the Scotland Office—the DTI is not signed up to the internal inquiries. Indeed, decisions being taken by the Scottish Executive seem to show that they are washing their hands of the entire process. I very much regret that.
The matter has left in the public mind an impression of complete mess and a feeling of utter disappointment. The public inquiry that I have called for, and that has been supported by other hon. Members, is needed now more than ever. I am not simply hoping that we shall be able to return to the previous position—no one believes that that is possible—but it would be helpful if Ministers would admit that mistakes have been made, and perhaps even apologise to those who have lost their jobs. Most importantly, we want to learn lessons for the future.
It would be unfortunate if I were not to highlight the fact that there have been some positive responses—many positive responses—from the Scotland Office and the Scottish Executive. A working party has examined the devastation associated with Viasystems and with the many other hundreds of jobs that have been lost in textiles and farming. There has also been additional funding for Scottish Borders Enterprise and relaxation of capital constraints for the local council. However, the process is slow, and many people in the area are extremely unhappy and worried that, eventually, those measures will replace the many thousands of jobs that were lost.
The report is good and constructive, and it offers the House a valuable insight into the changing market for inward investment into the United Kingdom generally. More than anything else, however, it highlights the fact that there are still many lessons to be learned about inward investment into Scotland and into the United Kingdom generally.

Several hon Members: . rose—

Mr. Deputy Speaker (Mr. Michael Lord): Order. Many hon. Members are seeking to catch my eye, and, unless the remaining speeches are reasonably brief, many people will be very disappointed.

Mrs. Maria Fyfe: I shall certainly attempt to be brief, Mr. Deputy Speaker—please make throat-cutting motions at me if I am not.
Just as I know that there are other planets circling other suns millions of miles away, although I have never seen one, I know that there are inward-investing firms creating thousands of jobs in Scotland, although I have never seen one in Maryhill. I never expected the Tories to care; and, now, things are beginning to be a bit better. I am hoping that things will be a lot better, and hope to hear some constructive comments at the end of the debate from my right hon. Friend the Secretary of State.
Although the report's recommendations are probably very sensible for Scotland generally, I honestly cannot say that they seem very relevant to much of my constituency or to other deprived areas around Glasgow. Glasgow has far too few substantial factories employing hundreds and owned by indigenous companies or inward investors. The biggest employers in my constituency are the public services. Scotland has a huge range of manufacturing jobs. They do not require exceptional skills or qualifications and can be sited anywhere, so I ask myself why those jobs are not coming to Glasgow.
The Government have been successful in dealing with sudden job losses caused by factory closures in many parts of Scotland. In one or two cases, they have been so successful that the area has ended up with more jobs than it had to start with. The problem for Glasgow is that it lost thousands of jobs years and even decades ago. We need a task force to attract manufacturing jobs back in. I should like the Secretary of State to discuss that proposal with the Scottish Executive. I agree with my right hon. Friend the Chancellor's view that jobs are the main way out of poverty. There are just not enough jobs in Glasgow. I want more private sector jobs in my constituency and in the city as a whole. I do not accept that that cannot be done.
Today, we heard the splendid news that Scotland's dole queue fell last month to a 23-year low. The number of unemployed is down by 25,000 compared with a year ago. Glasgow's unemployment figures have fallen from 15 per cent. in 1996–97 to 13.5 per cent. in 1997–98, but the city's unemployment rate, currently 6.8 per cent., is still double that of Scotland as a whole. Unemployment in my constituency stood at 10.1 per cent. in April this year. That is an improvement on 1997, when it was 13.6 per cent, but it is still too high.
A lot of the jobs that have come to Glasgow are in call centres. They are low paid because employers know that people are desperate for work. If it were not for Labour's national minimum wage policy, a lot of people who are in work would be far worse off than they are.
The in phrase now is "drive to move up the value chain". Many of my constituents would like to be on the first rung of that chain. As my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) has pointed out, the three-volume report devotes only half a page to Glasgow, dealing with the contribution from the regeneration fund on micro-enterprises. That fund has only £3 million to spend on Castlemilk, Drumchapel, the east end, north Glasgow, Gorbals, Govan, Greater Easterhouse and Greater Pollok. That sum should be looked at afresh.
The Federation of Small Businesses recently proposed the creation of a Scottish enterprise development bank to overcome the problem of the conservative attitudes of the major banks' lending policies. Perhaps we could consider that. As my hon. Friend the Member for Shettleston has said, the Glasgow agencies failed to respond to the request to offer evidence to the Committee. I have not had time to find out why. Perhaps they all thought that someone else was doing it. I would have liked to hear their views on shipbuilding. Glasgow Members have lost count of the number of times that Govan or Yarrows have had to look for support to win a necessary contract. The world needs ships and they are being built elsewhere. We hear reasons why the contracts go out of the country. Sometimes there

are allegations that other Governments are less punctilious than ours about competition rules, although our Government say that that is not the case.
Somehow our city, which led the way in shipbuilding, is not getting its share of the world market. There is a history of under-investment to explain the loss of the trade in earlier years, but now I am told that our yards are as high-tech as any in the world, so I wonder whether my right hon. Friend would consider commissioning a study of what our yards need to do to get back a decent share of the world trade in shipbuilding.
The Minister of State, Scotland Office, responded to an earlier plea of mine by creating a new addition to regional selective assistance of £3,000 per head for every new job taken up by a person living in a deprived area. When I last asked what had resulted from that very progressive initiative, which I greatly welcomed, I learned that some money had indeed been paid out, but none in Glasgow. I wonder whether employers are aware of it and are still saying no to investment in our poorer areas. If they are, we need to know what the employers are saying and then consider how to respond. This is information that we do not appear to have.
One critical point in the report is that RSA focuses on the number of jobs created, rather than the quality, and does nothing to create high-quality jobs. There are some high-quality jobs in my constituency in the science park, but they are held in the main by people who live outside Glasgow and pay their council taxes outside Glasgow.
Too many constituents in Maryhill and Glasgow generally have left school with few or no qualifications. Hardly anyone attends further education and higher education is rare for school leavers. There are problems in getting jobs that are appropriate for people who lack qualifications.
Today's newspapers carry a story about the Scottish Parliament's Enterprise and Lifelong Learning Committee criticising confusion, overlap and duplication among the hundreds of agencies involved in support for enterprise, and the call for them to work together. This is already happening in Glasgow, with all the relevant agencies formed into an alliance. However, unemployment is twice the Scottish average. We have to take a fresh look at how to tackle that.
Glasgow's job-creating efforts are not working as successfully as I would like. I would like a detailed examination of why so few manufacturing companies looking for a suitable site end up in Glasgow. I know that they like greenfield sites, but we have plenty of attractions to offer. I wonder why it is not happening.
The problem in Maryhill and constituencies like it is one of poverty that jobs can overcome. Just now, there is a lot of prosperity in our country and the shop windows are full of goodies, but too many of my constituents have no hope of enjoying much festive fare. Many good moves have been made by this Government in a short space of time—the working families tax credit, higher child benefit and the national minimum wage, to name only a few. However, we need jobs. I hope that we will get on with it and make a concentrated effort where needs are greatest.
It is a long time since Maryhill had a boom, and too many of my constituents are bust. Let us have an end to boom and bust. It is time for action for Glasgow.

Mr. James Gray: It is a pleasure to follow the hon. Member for Glasgow, Maryhill (Mrs. Fyfe)—not least because I spent a large amount of my childhood in my parents' car outside Mr. and Mrs. Moreland's butcher's shop in Maryhill road-— hope that is still there—which sold the best beef in Britain.
May I apologise to the House, and to you, Mr. Deputy Speaker, for the fact that I will not be able to stay for the winding-up speeches, as I have been called away on other business?
I wanted to take part in the debate because inward investment in Scotland is very important to me. The last thing that my father said to me before he died was, "Do not neglect the Kirk, nor forget Scotland." I fear that I may have done the former—not least because I attend the Church of England, for my sins, in North Wiltshire—but I have not done the second. Once a Scot, always a Scot, I believe. Despite the fact that I represent an English constituency, the interests of Scotland—and of my mother and relations, who live in the constituency of the hon. Member for Stirling (Mrs. McGuire)—are always at the forefront of my mind, despite my strong English credentials when I speak on English matters.
Some of my right hon. and hon. Friends and I are concerned about a number of aspects of inward investment in Scotland. The statistics produced by the Locate in Scotland annual review show that projects came to a peak in 1993–94, at 97 a year, and the figure is now down to 78. Planned investment, which peaked in 1996–97 at £3.1 billion, is now down to only £761 million. Planned jobs, having peaked around the time of the general election, have declined considerably. Those statistics are worrying.
Although I am not a member of the Select Committee, I thought that I might reflect on why those problems have occurred. There are three possible reasons. The first is the devolutionary muddle, as I see it. I have made no secret of the fact that, unlike the rest of my party, I am wholeheartedly opposed to the devolutionary settlement that the Government have imposed on my home country. The second reason is tax and regulation, and the third is transport.

Mr. Alasdair Morgan: Is not the downturn in the south-east Asian economy the most significant factor in the decrease in inward investment in the past couple of years?

Mr. Gray: The hon. Gentleman may be right. I was not proposing an encyclopaedic tour of all the reasons for the decrease; there may be many.
Inward investment has declined considerably this year compared with the previous two and with its peak under the previous Government. One gets tired of constantly hearing about boom and bust. The hon. Member for Maryhill mentioned it. The truth is that the statistics demonstrate that inward investment in Scotland was much better under the so-called boom-and-bust Conservative Government. Let us lay that ghost to rest.
I want to discuss the devolution muddle, as I would describe it. It is peculiar that a Select Committee of the House produced the report but the response came partly from the Government and partly from the Scottish Executive. Will the Secretary of State carry back the

messages of this debate to the Scottish Executive and, more importantly, will that Executive listen to him? If press reports are anything to judge by, one is not entirely certain that it listens all that carefully to him.
As an observer of these matters, I find it hard to work out what the Secretary of State's job is and what the purpose of the Select Committee and indeed the Grand Committee can be post devolution. It is all a bit of a muddle, and I hope that he may clear some of it up.
What happens when there is a policy dispute between the Scottish Executive and the UK Government? Labour Members may say that there is no problem because that is all dealt with clearly in the concordats and memorandums, but what happens when a company is being courted by both England and Scotland and the UK Government want the investment to go to England? Who would get the investment?
Labour Members may say that we have gone through all the great mechanism of the concordats precisely to sort that out. That may work—possibly—while there is a Labour Government in Edinburgh and a Labour Government in Westminster. I concede that there is likely to be a Labour Government or a Lib-Lab pact in Scotland—the Liberals may have some other view on that—for some time, although I think back happily to the time when my cousin was the Conservative Member for Glasgow, Govan, so let us not laugh too much about the Scottish Conservative revival. [Interruption.]Let us assume that there will be a Labour Government in Scotland for some time. [Interruption.]

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. This is absurd. The hon. Gentleman should be heard.

Mr. Gray: Thank you very much, Mr. Deputy Speaker.
What happens when there is a Labour Government in Edinburgh and a Conservative Government in Westminster, as will inevitably occur sooner or later? [Interruption.] Their febrile and fragile laughter suggests that Government Members may foresee that occasion coming sooner than some of the commentators would have us believe. What will happen to the concordats and memorandums then? If Government Members are saying that that will never happen, what has happened to their view of democracy? They are saying in their arrogant, new Labour way that there will never again be a Conservative Government because new Labour will run the world for ever and ever. The electorate will ensure that that arrogant approach comes back to haunt them.
Conservative Members do not believe that the concordats will prove to be sufficiently robust to withstand a fundamental disagreement between the two Governments.
I have concerns about inward investment in Scotland because of what the Government have done with taxes and regulations on business. Without any question, tax on business has greatly increased. The British Chambers of Commerce have calculated that costs for business will be increased by £30 billion by regulations introduced in this Parliament. Statistics from the Organisation for Economic Co-operation and Development, available from the Library, demonstrate that the annual increase in UK productivity has declined since the general election, from 2.2 per cent. between 1992 and 1997 to an average rise


this year of 0.7 per cent. I mentioned the Scottish figures earlier, but those that I have just mentioned show that the UK figures have also fallen.
The worrying fall in productivity, together with the rise in regulation, leads to loss of competitiveness. Indeed, in the world competitiveness league, Britain has fallen from fourth under the Conservatives to eighth under Labour. The Government must say why Britain is becoming less competitive and why Scotland, in particular, is suffering. British industry now produces 40 per cent. less per man hour than US firms and about 20 per cent. less than the French and the Germans.

Mr. Tim Loughton: Does my hon. Friend agree that Scotland will suffer especially from the unparalleled rises in road fuel duty charges, given its greater distances? Does he also agree that some heavy goods industries in cities in Scotland will suffer disproportionately from the Government's proposed energy tax?

Mr. Gray: My hon. Friend is right. His point about the climate change levy—or energy tax, as it should be called—is pertinent. It is interesting that the Government appear to be listening to their Back Benchers and backing off slightly, but the energy tax will still cost the steel industry—which especially affects Scotland—£20 million a year.
The president of the CBI, Clive Thompson, has said that the increase in taxation introduced by the Labour Government has amounted to much more than the sums that they give back, which are "trivial by comparison". How much worse that will be when the energy tax arrives. Bill Midgley, the president of the north-east chambers of commerce, has said:
It was disappointing that there was no mention of moves to reduce the amount of bureaucracy which is stifling business competitiveness.
Tax and regulation are going up, but competitiveness is going down. [Interruption.] Labour Members are chattering, but they should listen to what Scottish Energy has said of the energy tax:
The Chancellor is doing what he does best—playing the three card trick. We are still concerned about the burden on the manufacturing industry because only energy intensive users are eligible for the discount quoted.
In other words, Scotland will be especially heavily hit by the energy tax.
My hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) mentioned transport issues, which are already affecting inward investment in Scotland. The Government's response to the Committee's report has been disappointing. Fuel duties remain, despite the Chancellor's brave attempt to pretend that he will do away with them. According to the Red Book attached to the pre-Budget report, fuel duties will increase next year. Scotland is vastly more affected than anywhere else in the UK by that disproportionate increase in petrol and diesel.

Mr. John Swinney: The hon. Gentleman is pursuing an interesting line of argument. Were those arguments valid when the Conservative Government applied the fuel duty escalator many more times than even this disreputable Labour Government have done?

Mr. Gray: The hon. Gentleman makes an interesting point. He was not here at the time but, if he had been, he

would have remembered that the Conservative Government introduced the fuel duty escalator at 3 per cent., straightforwardly to raise revenue. The then Chancellor said that he needed to raise more revenue for schools, hospitals and other things, so he would introduce a fuel duty escalator. This Government have put it up to 7 per cent. and, in the last Budget, the Chancellor said that it would continue indefinitely, although it is a bizarre escalator that never stops. The Government may be backing off it now, but the figures in the Red Book show a 4.6 per cent. increase in fuel duty year on year from now onwards.

The Secretary of State for Scotland (Dr. John Reid): I know that the hon. Gentleman would not want inadvertently to mislead the House. The Conservatives brought in the escalator at 2 per cent. and they immediately raised it to 3 per cent. They then raised it to 5 per cent. and, in a Green Paper just before the last election, they pledged that they would keep the fuel duty escalator. My right hon. Friend the Chancellor of the Exchequer has made it clear that he will not keep the fuel duty escalator. To complete the facts, of the 85p in the pound that is charged in fuel duty, 79p was imposed by the previous Conservative Government.

Mr. Gray: I am grateful to the Secretary of State for his clarification of the fact that we brought in the escalator at 2 per cent. However, he repeats a worryingly misleading remark that the Chancellor of the Exchequer made in the pre-Budget statement. The Chancellor suggested that, somehow or other, he was ending the escalator. He is not; he is continuing it. All that he said was that he would hypothecate the extra and would use it for transport.
There has been an interesting development in Labour party thinking. The Secretary of State for Scotland appears to be saying that the price of petrol will rise only by the rate of inflation—

Dr. Reid: rose—

Mr. Gray: Will the Secretary of State hold on for a moment? My understanding of what the Secretary of State said is that the Chancellor has committed himself to increasing the price of petrol only by the rate of inflation year on year and that the increase will no longer be automatically higher than the rate of inflation. If that is what he is saying, how does he explain the figures in the table at the back of the Red Book that show a 4.6 per cent. increase in fuel duty income year on year, both for next year and the year after that?

Dr. Reid: I can help the hon. Gentleman, who obviously supported a mechanism when the previous Government were in office that he did not understand. The difference with an automatic fuel duty escalator is that it rises automatically one year after another; it does not rise because of a year-on-year choice. My right hon. Friend the Chancellor of the Exchequer has now abolished the duty. Moreover, he has said that, should there be, in any given year, any increase over inflation, that will be ring-fenced and put into transport. I hope that that helps the hon. Gentleman to understand the policy that he apparently supported without understanding for six years.

Mr. Gray: I shall not rise to the Secretary of State's amusingly patronising manner. If he is suggesting that
petrol prices will not increase by more than the rate of inflation and that all the increase will be used for transport, which is not otherwise being provided for by the Government, I challenge him to return to the House after the next Budget when, without question, he will find that the price of petrol has gone up by far more than the rate of inflation. People in Scotland will thus pay disproportionately more because of the distances involved in travelling in Scotland.
I am surprised to hear the Secretary of State justify the huge increases in petrol prices. In Scotland, petrol now costs £3.50, £3.60 and £3.70 a gallon, and I remember the days when my father used to fill up his car for 10 bob. A price of £3.50 a gallon is extraordinary and it bears down disproportionately on Scotland.
I have a final point about transport. The Secretary of State says that all the money will be hypothecated. The important things about hypothecation are that it is permanent and that it provides additional money. We heard how little investment there has been in the transport infrastructure in Scotland, and the Select Committee went to some length to say how poor it was. Several hon. Members have said that they regret the fact that the response has not been better on that front. I therefore challenge the Secretary of State to commit the Government, without any deviation, to ring-fence all the extra revenue that may be raised through any increase in petrol duty next year for transport infrastructure in Scotland. Will he also specify what he will do after next year's Budget that he would not otherwise have done? In doing that, he will have to say that he will not provide the infrastructure that the Select Committee has called for.
Inward investment in Scotland has declined because of the devolution muddle that I talked about and because of the significant increase in taxes and regulation that the Government have introduced nationally since they came to power two and a half years ago. Most significantly, the Government's muddle over transport—they have had four Transport Ministers, and the Secretary of State was one of them—and their failure to invest in the transport infrastructure of Scotland are having a worrying effect on inward investment.

Mr. John McFall: I am delighted to be able to speak in the debate and particularly to commend my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) and his Committee for a worthwhile and substantial report.
I have been keen to focus on certain issues over the years and they have been mentioned in the report. The first is inward investment and after care. The line between inward investment and investment by indigenous companies is becoming increasingly blurred. For example, 60 per cent. of all inward investment is reinvestment by existing companies. The need to focus on that is very important.
Secondly, there is the issue of added value. Scotland used to be called a branch economy for inward investing companies—hopefully no more. The focus must be on research and development and on local sourcing. If we get that right—so far, too little attention has been paid to the matter—we will create many thousands more jobs in Scotland.
We must also consider the links between universities and industry. 1 recall the invention in the 1960s of flat-panel technology at Dundee university. The benefits of the technology were not produced or sourced there, with the result that more than 40,000 jobs are scattered around the world that should be in Scotland. Scottish Enterprise and the higher education institutions have looked at developing links between universities and the world of business and industry, but we have yet to move from analysis to action.
The report mentions one-stop shops. Some years ago, I recall making inquiries about Glasgow in that regard and discovering that people wanting to set up a business could make about 80 separate lines of inquiry. There is therefore an awful long way to go before a one-stop shop can be established.
I was delighted that the report suggested that Scottish Trade International and Locate in Scotland should merge. Another factor in that discussion is Highlands and Islands Enterprise. The hon. Member for Argyll and Bute (Mrs. Michie) is making faces at me, but there is a need for a strategic competence covering the whole of Scotland. That could be achieved by combining Scottish Enterprise and Highlands and Islands Enterprise, while still retaining the distinctive elements of the latter organisation.
Finally, there is the question of the duplication of services on offer from local enterprise companies, local authorities, enterprise trusts and other local bodies. We must get that right if we are to focus on economic development at local level. My hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) is right to say that there is no evidence of inward investment in many areas in Scotland. It is very important that we get that happening at local level.
As for the present—and future—economic environment, we are on the verge of the knowledge economy. Through the internet, technologies for computers, telecommunications and broadcasting technologies are starting to converge. The result is that our lives and life styles are going to change enormously.
For example, British Telecom has declared that it wants to source as much of its services as possible on the internet. In one year, that will save the company £70 million, and other companies are clearly going to follow suit. That will have implications for jobs, our town centres and for the way in which we do our business. We have not got around to thinking about that in Scotland yet, but e-commerce will affect how business is done.
I visited Lindendale university in St. Louis recently. It has a student population of 8,000, and its president, Denis Spellman, told me that the university would have to change enormously as a result of the knowledge economy and e-commerce. The report contains echoes of that prediction. In paragraph 114, it states:
It is not enough to have excellent universities unless their output can be harnessed for the wider benefit of Scotland. This is not a uniquely Scottish problem; we heard in Virginia of the problems of bringing together to their mutual benefit a university culture whose roots are in the middle ages and whose time-scale is based on university terms and a technological one which thinks in web-hours and in which 'instant gratification is too slow'".
The way in which business develops therefore has enormous implications for our universities.
One area on which the report did not focus, but on which we should focus more, is the need to develop our local economy and to promote and develop small


businesses. In America, the success of the Clinton presidency was based on the development of 8 million jobs in small businesses during his first term. At the Glasgow chamber of commerce dinner a few weeks ago, Peter Sutherland, the ex-commissioner, mentioned that, every year in America, 900,000 businesses are set up. At the end of the year, 800,000 go out of business, but that means that 100,000 new businesses are set up every year. Scotland has not had a culture of starting new businesses, giving people confidence to develop their businesses and go through the pain barrier, and helping them develop. We need to do that. Yes, there are good ideas in Scotland but how do we harness them into developing businesses and keep them going? That is the big secret. In the 21st century, the economy will depend on the development of small businesses. It can be called entrepreneurship and it is important that schools and universities focus on it.
A few weeks ago I read a book by Charles Handy called "The New Alchemists", in which he looks at entrepreneurs. Oswald Boateng, Charles Dunstane of the Car Warehouse company and Richard Branson left school without qualifications but with ideas. Somebody nurtured and encouraged them to develop their ideas. We need to do that in Scotland. In the 21st century, we will do that through our information and communications technology. We should widen the curriculum and ensure that we are ready to take advantage of future opportunities.
As my hon. Friend the Member for Shettleston said, we need infrastructure. I agree that the M74 is an important link because I want Scottish goods to get to our most important European market—England. It is important, too, if we are to get the benefits of the Single European Act, which Baroness Thatcher signed us up for in 1985, by putting our goods into Europe. We are not doing that sufficiently well now.
I draw to the Secretary of State's attention a local issue. Last year. the J & B Whisky plant in my constituency was closed. To date, the Government have provided good help. Diageo, the company that closed it, West Dumbarton council, Dumbartonshire Enterprise and I are working very closely together to see if we can find a novel solution to replace the lost jobs. It was a body blow to lose 500 jobs and a company that had existed for 30 years. We need to do something to replace those jobs. My right hon. Friend the Secretary of State has been of assistance in the past and I know that he will continue to assist us. I assure him that I shall be knocking on his door.
Finally on the economy in the 21st century, one writer drew an analogy between "fleas and elephants". I was reminded of that comment a few weeks ago when I met Governor Gray Davies of California. He said that, in the first six months of this year, venture capital investment was $$14 billion in California. Obviously, we could never get near that figure. In terms of that analogy, I think that we are a flea and it is important for the Scottish economy to get on the back of a good elephant. That is the way to prosper.
Inward investment is important—never let us forget it. In Scotland, we have 600 overseas companies prospering themselves and the population, of which 50 per cent. come from north America, 40 per cent. from Europe and 10 per cent. from the far east. We must maintain that focus while having a complementary approach of developing and enhancing small businesses at local level. That way, we shall sustain our future.
It is important to take the lessons of the report to heart and to start implementing them now. I look forward, with my colleagues and the Scottish Executive, to the implementation of those policies so that we have a more prosperous and, most importantly, socially inclusive Scotland in the 21st century.

Mr. John Swinney: It is a privilege to follow the hon. Member for Dumbarton (Mr. McFall) who has just delivered a speech which demonstrates why he was such a successful Minister at the Northern Ireland Office. I warmly compliment him on his term in office there, and wish him well in his work on behalf of his constituents in Dumbarton.
The hon. Gentleman spoke about after care for businesses, and that applies across the board. In too many cases, while there is almost an overdose of support for starting up businesses—which has its own problems—there is a poverty of support when it comes to after care. That is of fundamental importance to the issues with which we are wrestling.
I compliment the hon. Member for Glasgow, Shettleston (Mr. Marshall) on the report of the Select Committee on Scottish Affairs, of which he is Chairman. It is a valuable report, assisted by the hon. Gentleman's experience of chairing other Select Committees. He brought to bear his considerable experience of transport issues in his contribution to the earlier debate. Perhaps I will leave that where it ended—in the debate.
The report is thoughtful and dispassionate. I could accuse the hon. Gentleman of being thoughtful in his contribution, but 1 could not accuse him of being dispassionate. He expressed his views, including his views about other parties, very firmly. I shall come on to some of those points in a moment.
The report makes many good, common-sense points, a number of which have been responded to positively by the Scottish Executive and the Secretary of State for Scotland. I specifically welcome what the Committee said about transport infrastructure. Considering the poverty of investment that our transport infrastructure has suffered in the past, and the dearth of investment in road and rail, it is no surprise that there is debate on both sides of the House about which project is the most important.
I welcome the Committee's comments on encouraging a movement up the value chain of successful investments and projects. The hon. Member for Glasgow, Maryhill (Mrs. Fyfe) made the serious point that some people are still trying to get near the value chain before they can move up it.
I also welcome the Committee's comments on the importance of measuring the success of assisted projects. All too often, debate is not enhanced by clear information about which projects have been successful and which have not. The hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) raised a number of points about the difficulties that require scrutiny and answers. I hope that the Scottish Parliament may be able to consider some of those points.
The hon. Member for Shettleston said that this was an unusual debate. It is unusual—it is a hybrid debate between one era and another. The Select Committee started its report pre—devolution and reported on the verge
of devolution taking legal effect. The Secretary of State's office and the Scottish Executive both responded to the report. Those two responses illustrate what has happened over the past few months. A vast number of areas of policy have passed from this House to the Scottish Parliament where they are being dealt with by Ministers.
I would like to make some additional comments about three areas of the report. The first is about the relationship between Scottish Trade International and Locate in Scotland. The Committee recommended that the Scottish Parliament should consider merging Locate in Scotland and the STI, and suggested that more resources were required for the work of Locate in Scotland in the United States.
I have always been concerned about the balance of resources allocated to inward investment and exporting. It has taken some time for the allocation of resources to export support to catch up with the support allocated to inward investment and exporting. The two are largely in the same ball park area within the Scottish budget. However, it is important that effective support is given to exporting, which has always struck me as the poor relation of that aspect of our approach to economic development. A huge challenge faces us on exporting. Too few of our companies do it. The report mentions that a substantial number of small and medium-sized enterprises export, but there are not enough of them.

Mr. Douglas Alexander: Can the hon. Gentleman enlighten us on how a reduction from the significant diplomatic presence that the British state provides for Scottish exporters to the limited number of commercial embassies that the hon. Gentleman's party suggested at a previous Scottish election would in any way benefit those exporters?

Mr. Swinney: I wondered how long it would take before the first pathetic Labour intervention on my speech—[Interruption.] If the hon. Member for Cumbernauld and Kilsyth (Mrs. McKenna) will listen to what I have to say, I shall answer the points raised in the Select Committee's report. We are here to discuss that thoughtful report, which was agreed by all parties.
The report suggests a merger of Locate in Scotland and the STI. During the general election campaign, the Scottish National party argued for the closer integration of those two bodies and the Scottish tourist board. We argued for a single agency that would draw together all the external presence of those three bodies to ensure that we had a strong overseas presence to promote Scottish interests in exporting, inward investment and tourism.

Mr. Alexander: Will the hon. Gentleman give way?

Mr. Swinney: Will the hon. Gentleman let me finish making my point? The response of the Scottish Executive to the report makes it clear that they do not agree with the Select Committee's recommendation for merger, but it adds that there is room for greater co-operation and synergy between them. Surprise, surprise, the response continues to tell us that:
In a pilot exercise in the United States, the operations of LiS, STI and other parts of Scottish Enterprise are being more closely integrated to pursue more effectively the full range of relevant economic development opportunities available.

That was the argument that my party pursued at the election. If the hon. Member for Paisley, South (Mr. Alexander) wants to hark back to the 1999 election campaign, he should hark back on the facts, not his invention.

Mr. Alexander: Will the hon. Gentleman give way?

Mr. Swinney: No, I have dealt with the hon. Gentleman's point and have nothing more to say on the matter. We need a realistic explanation of how the representation of Scotland can be advanced. It is a disgrace that Labour Members ridicule the arguments that we made at the election but now the Scottish Executive have submitted an endorsement of the SNP's policy at that election.

Mr. Alexander: rose—

Mr. Swinney: The hon. Member for Paisley, South can keep bobbing up and down trying to make the same point, but I am going to move on.
The second point on which I wish to touch is concordats, to which the hon. Member for Shettleston and the report referred. I thought of intervening on the hon. Member for North Wiltshire (Mr. Gray) when he lambasted the concordats for failing to deliver harmony between the Scottish Executive and the United Kingdom Government. I restrained myself because I could not remember whether the Conservative group in the Scottish Parliament had voted to endorse the concordats. I am fairly sure that it did, but I did not want to intervene only to find that I had the facts wrong. I am certain, none the less, that the hon. Gentleman's point was absolutely futile.

Mr. Grieve: The hon. Gentleman is well aware that the concordats are not legally binding documents, but agreements between the Executive in Scotland and the Westminster Government. For a party in opposition—although not the hon. Gentleman's as he does not believe in the Union—an endorsement of the concordats is an endorsement of the best agreement that can be reached between the two Executives at any given moment. I do not see how the hon. Gentleman's criticism of my hon. Friend the Member for North Wiltshire (Mr. Gray) can possibly be valid. [Interruption.]

Mr. Swinney: If the hon. Member for Greenock and Inverclyde (Dr. Godman) would like to explain what all that meant, I shall happily take his intervention. I do not quite follow the argument of the hon. Member for Beaconsfield (Mr. Grieve).
Paragraph C7 of the concordat on financial assistance to industry states:
There will be mutual consultation, between the interested parties in each particular case, in adequate detail and to a reasonable timescale, before making offers (formal or indicative) of financial assistance to cases within the following categories".
I imagine that that is intended to cover the issues raised by the hon. Member for Tweeddale, Ettrick and Lauderdale in relation to Viasystems. In that respect, it may be a fair point to argue.
My concern relates to evidence that was before the Select Committee. The hon. Members for North Wiltshire and for Tweeddale, Ettrick and Lauderdale dealt with


competition between different parts of the United Kingdom—an inward investment project coming to Scotland, versus one that was going to the north of England, perhaps, or the midlands. Paragraph 110 of the Select Committee report, entitled "Learning from the competition", records the evidence of—I assume—Mrs. Ray Macfarlane, the managing director, operations, of Scottish Enterprise. The report notes:
As previously stated, the Republic of Ireland has always been Scotland's 'arch enemy' in terms of inward investment. Mrs. Macfarlane hoped that as Scottish Enterprise went further down the line of looking for `tailored' `bespoke' projects which specifically suited the Scottish economy, the difficulty of putting `clear, blue water' between the two would recede. This remains to be seen.
While Locate in Scotland and perhaps a regional development agency for a part of England are duly submitting their respective bids to the Joint Ministerial Committee for adjudication, and while the bids are being discussed in Committee, the global market is applying pressure to the inward investor for the contract. What we should fear is not other parts of the United Kingdom, but the global competition. The market is now a global market, and there is a danger that, while we are negotiating in Committee, the projects are haemorrhaging away to other parts of the European Union. That point remains unanswered, and I look forward to the answers at the end of the debate.
A related issue between the Scottish Parliament and Westminster is regional selective assistance. There is an inconsistency between the map being reserved, and responsibility for decisions about allocations resting with Holyrood. We shall no doubt return to the matter in due course.
The Select Committee recommends that Scottish Enterprise should provide a central service to advise indigenous firms seeking advice or assistance. The hon. Member for Maryhill referred to the report of the Enterprise and Lifelong Learning Committee of the Scottish Parliament, which reported yesterday. I had the privilege to be in the Chair of that Committee.
At the beginning of my speech, I probably should have declared an interest as a Member of the Scottish Parliament. I apologise for not doing so.
At the Enterprise and Lifelong Learning Committee, I was pleased that we secured unanimity among all four parties on a thorough and robust report based on evidence taken over recent months on the issue of access by businesses to business support and advice in Scotland. I am sorry that the hon. Member for Maryhill is not present. She spoke about the Glasgow economy and the difficulty that some organisations experience in accessing business help.
An enormous number of organisations in the market provide business support advice. The report of the Enterprise and Lifelong Learning Committee refers to the range of organisations that are active in the Glasgow market offering such support. I am told that, if one turned on Radio Clyde and listened to the advertisements at any time of the day, one could find the telephone numbers of numerous organisations to contact for advice about business start-up.
That diversity must be tackled. There are far too many providers of such services, often competing for the same clients, and in many cases using the same sources of

public money to provide those services. The losers in the process are the people who need the support to assist their business development. I am pleased by the extent of agreement that has been reached among the participants from the four political parties in that Committee in the Scottish Parliament, and by the positive response to the report that was published yesterday by the Minister for Enterprise and Lifelong Learning, the hon. Member for Central Fife (Mr. McLeish).
What is important is that we spark a debate on how to deliver services to meet the demands of those who most wish to make a contribution to the developing Scottish economy. We have started that process and I look forward to further debate and discussion on the subject. Business support and economic development are fundamental to the health of the Scottish economy.
The Select Committee's report heartily advances and develops the debate on a number of key aspects and subjects. We need to sustain an active presence in the area of inward investment to guarantee our stake in the global inward investment market. We must ensure that Scottish companies can deliver a strong presence on export markets and broaden the number of companies involved in the process.
Most of all, we must have a cohesive and effective economic development strategy that delivers for the Scottish people and creates the right economic climate. Any climate that has interest rates at the height that they are now, with the damage that that causes to the Scottish business sector, is something on which the Government should reflect quickly.

Mr. Russell Brown: I congratulate my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) and the Select Committee on their report. I am pleased that I am now a member of that Committee and I look forward to some enjoyable sessions.
Much of the report is relevant to my rural constituency in Dumfries and Galloway. Like the constituency of the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore), mine has seen many manufacturing job losses in the past couple of years. However, between 1987 and 1997, it also saw a loss of some 2,500 manufacturing jobs.
When a rural area such as ours depends heavily on major companies such as Du Pont, Nestlé and Elopak, it is only natural that, when they feel the pinch as a result of what is happening in other corners of the globe and have to make cuts, we feel it hard.
I am interested in the report's comments on clustering, which is important. Between 27 and 28 per cent. of Galloway is forested, so forestry is clearly one example of what we can do in our locality. In the past two years, the local enterprise company endeavoured to clear and prepare a site for an Austrian company. Some £3 million was invested in that, only for us to discover in February this year that the company no longer intended to come to the Lockerbie area.
However, I am pleased to say that another local firm has decided to take part of that site. I am looking forward to tomorrow when we are likely to hear of a £5 million investment on that site with the potential to create some 100 jobs during a three-year period. Initially, there will
be forestry and sawmill work, which I gather will be developed into manufacturing. However, I will have more details about that tomorrow. I am delighted about that.
Let me dare to talk about the clustering of education. Dumfries is abuzz at the moment with the potential development of the Crichton site, providing campuses for Glasgow and Paisley universities and Dumfries and Galloway and Bell colleges. I look forward to the day when we can retain local young people by providing higher education opportunities on that site. We need to harness their academic ability and keep the locality vibrant.
My hon. Friend the Member for Shettleston mentioned transport, and I note that the hon. Member for Galloway and Upper Nithsdale (Mr. Morgan) is in the Chamber. The A75 is not just any old road; it is an important avenue for economic development in our area. The alternative road that leads to a ferry port is the A55 in north Wales, which has received six times as much investment. It is not surprising that people in south-west Scotland feel somewhat disfranchised. If we are to move forward and have genuine inward investment, we must ensure that the infrastructure is right.
Inward investment does not offer all the answers because my constituency is rural and our challenge is to create an outward-looking and prosperous local economy. We want proper indigenous investment as well as a small amount of inward investment. We want to make that part of Scotland a model for rural development.

Mrs. Rosemary McKenna: I also welcome the Select Committee's report. I was briefly a Committee member but I left before the inquiry began. I shall be brief because many of my colleagues want to speak and there is not much time.
I am keen to take part in the debate because I was a member of Scottish Enterprise from 1994 to 1997. I was involved in the discussions that led to its creation. Locate in Scotland is part of Scottish Enterprise. It is an important organisation, which has grown from strength to strength. I point out to the hon. Members for North Wiltshire (Mr. Gray) and for North Tayside (Mr. Swinney) that we are successful in attracting inward investment not only because of Locate in Scotland but because Scotland is very good at partnership working—that is demonstrated by the fact that we set up Locate in Scotland. The support of embassies throughout the world is crucial to attracting inward investment to Scotland. The increase in inward investment in the years to which the hon. Member for North Wiltshire referred was due to the creation of the single market and the work of Locate in Scotland. It is important to put that on record. Since 1997, there has been a substantial increase in inward investment of £2 billion, which has created 30,000 jobs in Scotland. The matter is complex.
I shall briefly consider the summary of the report's conclusions. Transport is vital. Anyone who is familiar with the route from Glasgow to the north of Scotland knows that the A80 through Cumbernauld is the biggest bottleneck in Scotland. Sorting that out is crucial to the development of good infrastructure. I agree with my hon.

Friend the Member for Glasgow, Shettleston (Mr. Marshall) that we need the M74, but I believe that we need the M80 far more.
I do not understand the reason for the lack of investment in public transport between areas where there are jobs and areas of high unemployment, such as the constituency of my hon. Friend the Member for Shettleston. The transport links between those areas are poor, and we should examine that. More funds should be made available, but we must be careful because funds are also important to encouraging and developing indigenous industries. I would be more circumspect, and not simply demand more money for Locate in Scotland. The matter is more complex than that.
We want to be involved in the debate about the future of Locate in Scotland and Scottish Trade International. That leads us to the future of Scottish Enterprise. The Minister for Enterprise and Lifelong Learning in the Scottish Parliament—my hon. Friend the Member for Central Fife (Mr. McLeish)—has begun that important debate, which must be reasoned and based on knowledge and information.
Scottish Enterprise is a dynamic organisation that is always ready to move forward, as its chairman, Sir Ian Wood, showed when he gave evidence to the Committee; he agrees with the recommendation to link Locate in Scotland and the STI, although a lot of other issues have to be looked at. We have to move forward continually and my constituency of Cumbernauld and Kilsyth has been successful in attracting inward investment. Significant companies—from not only Japan, but Germany, France, Korea and the United States of America—have located there and recently a successful investment was made in a call centre by Morgan Stanley Dean Witter, creating sound financial sector jobs. That is a good example of how we can move forward.
Our jobcentre staff have shown tremendous commitment. They embraced the new deal from the beginning and took it forward, so much so that we have reduced youth unemployment in my constituency by 72 per cent. The overall reduction is 40 per cent., and we have to take that example to the rest of Scotland and use the information that it provides to take us forward. I agree with my hon. Friends the Members for Glasgow, Maryhill (Mrs. Fyfe) and for Shettleston: we need to use the skill and knowledge that has developed in successful areas to help the areas of Scotland where there is deep poverty. That is how to tackle social exclusion.
As my hon. Friend the Member for Dumbarton (Mr. McFall) said, we must recognise that the world economy is changing. For example, in the words of Alf Young in the 10 December edition of The Herald,
the new economy based on new technologies and high-value services traded on the Internet, is coming at us like a Caribbean typhoon.
We have to accommodate all those changes and I believe that Scottish Enterprise has the will to take us forward. It is the right organisation to do so and will be very much involved in the debate, which is about what is best for the people of Scotland and sharing information in Scotland and in the rest of the United Kingdom. We should not follow a hysterical nationalist agenda.

Mr. Douglas Alexander: With some trepidation, I rise to speak: I am not a member the august Scottish Affairs Committee, but I have been emboldened by the characteristically generous remarks of the hon. Member for North Tayside (Mr. Swinney). I pay tribute to my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall), who is unfortunately not in his place, because I know that he has done a great deal of work on the Committee's report. I agree with its authors that this is a timely point at which to consider the whole issue of inward investment, given that it was prepared at such a critical juncture for our constitutional future.
The challenge for Members in all parts of the House at this point is to ensure that the new constitutional architecture is able to work to the advantage of the Scottish economy as a whole by successfully securing continued inward investment. I want to give the House a sense of the significance of inward investment to my constituency of Paisley, South: it is central to the Renfrewshire economy, of which my constituency is a part. From a Renfrewshire work force of 121,000, inward investors employ upwards of 13,000 people and 50 per cent. of all manufacturing jobs in Renfrewshire come from inward investors. I am proud to note that four significant inward investments have been made in Renfrewshire over the past few months, creating more than 1,000 new jobs.
Over recent years, Renfrewshire has attracted a range of major direct foreign investment, first in electronics and now in the developing call centre and internet sectors, which were discussed by my hon. Friend the Member for Dumbarton (Mr. McFall). They contribute to Renfrewshire's £5.4 billion of exports, which in turn make up more than 30 per cent. of Scotland's total manufactured exports. The importance of inward investment in not unique to the Renfrewshire economy. As the authors of the Select Committee report confirmed, inward investment is absolutely crucial to the manufacturing base of modern Scotland. The massive job losses suffered in manufacturing areas such as west central Scotland—of which Paisley, South is part—resulted in large measure from the two recessions in as many decades created by the previous Conservative Government. They have increased Scotland's reliance on inward investment over the past two decades.
As the report makes clear, the importance of foreign direct investment in the Scottish economy can hardly be overstated. There are now nearly 600 overseas-owned concerns in Scotland, providing some 80,000 jobs. Scottish Office evidence given to the Select Committee showed that emphasis was placed on the role of inward investment in helping to restructure Scotland's economy in the context of new, lighter manufacturing activities based on modern technology and scientific developments. For more than 20 years, the electronics industry—Compaq and IBM are close to my constituency—has been the single most important industrial sector for manufacturing inward investment in Scotland.
The keys to our success in Scotland, in terms of electronics inward investment, are now well established. The rapid growth of the market for electronic products, allied to the presence of a critical mass of related electronics companies in west central Scotland—and,

indeed, in parts of Fife—combined with high-skill labour markets, have produced attractive locations for inward investment by electronics firms.
In the face of evidence of the strength of our electronics sector, it is easy to lose sight of the fact that foreign investment now transcends electronics, and extends to a number of parts of the Scottish economy. Foreign companies are investing in sectors as diverse as food and drink, chemicals and petroleum products. As with the rest of the economy, the case for the centrality of inward investment in the Scottish economy is comprehensively made by the report.
One of the merits of the report is the effectiveness with which it counters the idea advanced by critics of inward investment that a crude choice can be made between an economy that supports inward investment, and an economy that encourages the growth of indigenous enterprises. That was brought home to me by evidence presented to the Committee by Renfrewshire council, which said that inward investors in my area were playing a key role as suppliers to incoming investors. I feel that such a relationship can be mutually beneficial, and can benefit every part of the economy.

Mrs. Ray Michie: The hon. Gentleman lauds the benefits of inward investment, and I endorse that. We have heard a good deal about the 30,000 jobs created by it, and I am grateful to the hon. Gentleman for telling us how many jobs have been created in his constituency. Can he explain why those jobs, and that inward investment, have not got to Maryhill or Argyll?

Mr. Alexander: I will answer that by echoing what has been said by others. We must recognise that, despite regional selective assistance and the efforts made by organisations such as Locate in Scotland, at a certain level, inward investment decisions are essentially commercial decisions, determined by the management of private companies. This is radically different from the regional assistance that was offered in the 1960s and 1970s. Nevertheless, I believe that inward investment makes a significant contribution. If the hon. Lady visited Compaq in Renfrewshire and saw the travel-to-work area there, the crude myth that, if a factory is located in a certain place, that is the only part of Scotland that benefits would probably be exploded.
I feel that the central challenge presented by the report is this: how, with the new constitutional architecture, can not just the Westminster Parliament but the Parliament in Holyrood best improve on the success of inward investment that has already been achieved? I think that two key drivers dictate that success, not just in Scotland but throughout the United Kingdom. One is economic stability, and the other is political stability. The Government have a proud record of achieving economic stability in their first two years in office: inflation is on target, public borrowing is under control, and unemployment is falling again. I was thankful to see the figures for Scotland yesterday.
In such a transient international marketplace, the case for economic stability almost goes without saying, but I also want to emphasise the significance of political stability. If we were to compromise economic stability with constitutional instability of the type offered by the
Opposition. I fear that a heavy price would be paid, not only by employees but by companies throughout Scotland.

Mr. Swinney: Which party does the hon. Gentleman mean?

Mr. Alexander: I mean either a party that sought to renegotiate the terms of the treaty of Rome, or a party that sought to renegotiate the terms of the Act of Union. Both pose a significant and profound threat to the people of Scotland.
In recent elections that the hon. Member for North Tayside is keen not to discuss, we defeated the party that stood for the status quo. I feel that the threat posed to inward investment by a party of separation is profound and real. It is only by an effective and dynamic partnership of both Parliaments that we can move forward. I commend that approach to the House.

Mr. Dominic Grieve: It has been a pleasure to listen to the debate. I apologise if my remarks are brief. It seems to me and, I dare say, to the Secretary of State, that greater benefit is to be derived from listening than from standing up and pontificating. The interesting speech of the hon. Member for Paisley, South (Mr. Alexander) reinforced my view that it was worth waiting for.
The report is interesting. Some of the areas of interest lie not in the recommendations, but, as often happens in such reports, in reading the body of the text. There are occasions when Select Committees make many pithy comments, but do not wish to embarrass the Government too much, so they do not embody the comments in recommendations and call for a response.
I was somewhat sorry to see how brief the response from the Westminster Government was on some of the issues. It was confined to the narrow recommendation on transport and wholly avoided some of the comments, particularly those in paragraph 58 concerning taxation.
Several issues in the report need to be looked: taxation, transport infrastructure, on which we have important responsibilities, and the whole area of concordats, on which I do not wish to dwell at too much length this evening, although I will make one or two comments in view of the remarks by the hon. Member for North Tayside (Mr. Swinney).
The Conservative party—I make it clear to the Secretary of State because, sometimes, it does not yet seem to have got into his head or those of other Labour Members—wants the devolved structure to work. We want the concordats to work. We want Scotland to prosper under devolution. Therefore, the remarks that I shall make are all designed to ensure that that comes about.
We are concerned that, in relation to taxation, the Committee seems to be letting the Government off the hook in its report. Scotland's problems are not unique. The point is made in the report that Scotland is a peripheral area within the European Union. For that matter, the United Kingdom is a peripheral area within the European Union, except possibly for some small slither of the south-east. Therefore, if we want the country to

prosper, we will have to make it uniquely attractive for inward investment and to ensure that companies wish to locate here because of the advantages that we can offer.
Over the past few years, the evidence has been overwhelming: we have been able to do that largely because of an extremely good tax regime. The City of London provides a unique financial sector, which—1 say to the hon. Member for North Tayside—is of inestimable benefit to Scotland, as it is to England. Companies wish to locate because there is a stable financial framework.
Attracting inward investment is a challenge. The Government cannot escape the taxation issues that are raised in the report. Paragraph 58 spells it out clearly. It goes into the whole issue of how the Republic of Ireland, for example, has succeeded in making itself attractive to inward investment by lowering corporation tax to derisory levels. It also goes into the way in which other countries such as the Netherlands have facilitated inward investment.
The Government's record on the matter is extremely poor. The rise in overall taxation has taken place under the present Government. It has been commented on again and again, and it is directly affecting business.
Early in the debate, we looked at the some of the statistical evidence. I regret one part of the contribution of the hon. Member for Glasgow, Shettleston (Mr. Marshall). There is a Kafkaesque delusion about what happened during the 18 years of so-called Conservative misrule. The statistics from Locate in Scotland—

Ms Rachel Squire: Will the hon. Gentleman give way?

Mr. Grieve: No. I do not have enough time. I apologise, but I simply do not. I know that the Secretary of State and the hon. Lady will understand that.
The evidence from Locate in Scotland's own statistics is that the surge in investment in the early 1990s was massive and simply cannot be wished away. Moreover, it undoubtedly continued in the first two years of the Government. There is also some evidence that it has diminished. It was suggested in the debate that the south-east Asia crisis is one reason for that decline. Although I do not disagree with that, it is also worth considering whether the fiscal climate that we are creating is attractive to business. Opposition Members question very much whether it is.
The point was made very forcefully by my hon. Friend the Member for North Wiltshire (Mr. Gray) that the situation on fuel taxation and the fuel escalator has been getting completely out of hand. I am perfectly prepared to accept what the Secretary of State has to say: environmental reasons, among others, made the fuel escalator seem attractive—a point that has been reinforced by Ministers time and again to the Environmental Audit Committee, of which I am a member. However, the evidence has been overwhelming that the escalator has not been producing the desired results, and that it has been having a highly negative effect on business, particularly business located in remote rural areas. Therefore, it should be a particular concern when we consider the economy in Scotland.
The best way of achieving inward investment is not by all sorts of magical wand-waving and quasi-autonomous non-governmental organisations. Although those may be


able to help, ultimately, if the fiscal and financial climate is not good for inward investment, it will not happen. If the climate is good, inward investment will pour in to most areas, apart from the most deprived.
I tell the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) that I understand the force of the points that she made. I know her constituency a little, and appreciate that it has been wholly bypassed by the benefits that have come to many other parts of the United Kingdom. That problem undoubtedly needs to be dealt with.
The report contains an excellent section on a changing world, and paragraphs 19 to 21 go into great detail about the complete change in the world economic climate. One of the points that was made is that it is simply not possible to continue examining economic issues in an old-fashioned way—although, after listening to one or two speeches in this debate, it seems that we are still using blinkered vision that deals far more with the 1960s than with current-day problems.
The old dividing lines are undoubtedly now blurred, and Scotland—just as much as the rest of the United Kingdom—has to live in a different world. That is why I return to the point on tax that I made to the Secretary of State. If indeed we are over-regulating and putting £30 billion of extra burdens on United Kingdom industry and business, it is not surprising that the inward investment level may be slackening. One does not have to go to south-east Asia to discover the causes of that.
I shall now deal—I am sorry to have to do it so briefly; I should have liked to go into it in greater detail—with the general matter of the concordats. I tell the hon. Member for North Tayside that the question on the concordats is not whether they are the best thing on offer, but whether, in view of the voluntary nature of the concordats—they cannot be sold as anything else—their best chance of long-term success, facilitating inward investment and not being messed around by the hon. Member for North Tayside and his colleagues, should they ever have the opportunity, is in rapidly establishing them as constitutional convention. The concordats undoubtedly seem to be fairly well drafted, although it is a great pity that we did not have a chance to see them earlier.
If the concordats are established as convention, there will be a framework in which we are able to operate, and a framework in which a future Conservative Government may well find relations easy with a Scottish Executive who are not necessarily of the same political complexion. The Secretary of State, as a Unionist, should be wishing for such a framework. In those circumstances, therefore, it is a legitimate matter for us to wish to consider.
We are also bound to express anxieties that there remains an enormous lack of clarity about how the relations work in practice. Picking simply one point—which is slightly peripheral to the issue—as an example, it is slightly unclear whether the Secretary of State for Scotland was ever informed by the Prime Minister that an offer on beef had been made by the French Prime Minister. Although the Secretary of State would have been right to turn down the offer, I do not know whether he was told of it. If that is the level of co-operation, there is legitimate cause for anxiety.
It is time for me to bring my remarks to a close. [HON. MEMBERS: "Hear, hear."] Another time, I shall be far less liberal in giving way to Labour Members and allowing them more time to speak.
I reserve my final remarks for the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore), who said that education needed to continue north of the border. I heartily agree. I have visited businesses elsewhere and, if he would like to recommend some in his constituency for me to visit, I should be only too happy to take up his offer.
I very much hope that devolution continues to succeed, but it will require scrutiny and, above all, a proper fiscal climate for inward investment.

The Secretary of State for Scotland (Dr. John Reid): Because of the time constraints and the fact that some speeches have been cut short to allow time for others to contribute, I shall not take interventions. I apologise in advance for that and for the fact that I may not cover everyone.
I am tempted to respond immediately to the point on beef. I should like to correct the hon. Member for Beaconsfield (Mr. Grieve) on the facts of the case, as I have had to correct his colleagues. No formal offer was made during tripartite discussions. The idea of a herd-based scheme was discussed at the margins with a number of people, including the Scottish Executive's Minister for Rural Affairs, who was aware that the issue was coming up. Had it been put into effect, it would have had no implications in Scotland, because it would have meant abandoning the law and science and everybody in Europe who was supporting us on the date-based scheme and changing to a narrow certified scheme that could have applied only in Northern Ireland. Had it applied to Scotland with a narrow definition of grass-fed cattle, it could have applied to less than 1 per cent. of Scottish cattle. That is why I am so disgusted that the only allies that the French seem to have in Europe on the issue are the Scottish nationalists. I would have been insulted if the Prime Minister had even considered making any formal approaches to any of us to abandon our correct position.
Now that I have put that right, I shall turn to the report, on which I congratulate my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall). A tremendous amount of work went into it and he was central in steering it through the Committee. Inward investment and good export performance are important issues. They are both essential to the health of the Scottish economy, although we should never forget how dependent we are on the indigenous growth of our own industries, small and large.
The debate is a useful opportunity to set out the basis of the Government's view. My hon. Friend the Member for Paisley, South (Mr. Alexander) had it in one. In this post-devolution era, the people of Scotland are interested in successful output and delivery—not endless discussion on the process of devolution, but how it makes day-to-day life better. Central to that is the concept of partnership. The policies of the Government here on fiscal and economic matters, international relations and the key elements of economic infrastructure, such as energy supply, telecommunications and transport links, are crucial to providing the right climate for business investment and success. We need to work in partnership with the Scottish Executive, who are responsible for promoting economic development and trade and providing assistance to business and industry. Both bodies need to work in partnership with the agencies involved in encouraging inward investment and the export trade.
The results of that partnership approach have been impressive and we abandon it at our peril. That is where my party, both in the Scottish Executive and in the Westminster Government, parts company with the Scottish National party. The illusion that, in place of that partnership, we can throw a ring fence around our economy, that a fortress Scotland policy will protect us from the real world, that conflict instead of co-operation will provide cohesion and that grudge and grievance are an adequate analysis of the world economy—

Mr. Alasdair Morgan: Wrong.

Dr. Reid: Absolutely. That analysis is wrong on every count, but they are all the policies of the Scottish National party. The idea that continual constitutional instability will be the basis for economic stability is a cruel illusion that will not be bought by the people of Scotland.

Mr. Swinney: Will the Secretary of State give way?

Dr. Reid: I am sorry, but I will not give way to the hon. Gentleman. He understands why. He is being selective in his interventions. I notice that he was wise enough not to involve himself in the compact disc recorded by some of his colleagues. Presumably, either he chose not to take part, or he was disqualified on the basis that he could sing.
Since we were elected in May 1997, the Government's sound management of public finances and our fiscal and economic policies have produced the very conditions of economic stability that the hon. Member for Beaconsfield described as essential. From May 1997 to date, inward investment in Scotland has amounted to more than £2 billion and an estimated 30,000 jobs. By any standards, that is an impressive performance.
Figures published by the Invest in Britain Bureau show that, although it accounts for less than 9 per cent. of the UK population, Scotland has consistently over the past few years secured between 12 and 20 per cent. of all inward investment projects attracted to the UK, and between 17 and 25 per cent. of the new jobs associated with such projects.
In the five years to March 1999, Locate in Scotland recorded 436 inward investment projects, involving planned investment of no less than £7 billion associated with the expected creation or safeguarding of nearly 68,000 jobs. That is the record of success of the co-operation that would be put in peril by the continual instability that the Scottish National party represents as the way forward.
In 1998-99, Locate in Scotland and its partners helped to attract to Scotland a total of 9,041 planned new jobs. So far this financial year, 1999-2000, inward investors have already—in only nine months—announced plans to create a total of 8,849 new jobs in Scotland. So Locate in Scotland, far from declining—as the hon. Member for Beaconsfield (Mr. Grieve) suggested—is well on its way to beating its performance last year.
It is not just the statistics that are encouraging. The range of companies and their activities demonstrate a robust portfolio. Project sizes have ranged from 25 to 1,500 jobs in both the central belt and in rural areas.
Of course, it is not all one way. My hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) mentioned how some areas have missed out, and I am the first to accept that. That is why the measures brought in by this Government on child benefit, the working families tax credit and the new deal are so important, as is the work carried out by the Scottish Executive on social exclusion and poverty.
The hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) mentioned a case from his area. I accept that companies will sometimes relocate—they have done from my constituency, including Cummings and Caterpillar. However, I assure the hon. Gentleman that companies are closely monitored. If they go elsewhere in the UK, they are monitored by the DTI to ensure that the money provided by this Government is not used merely to assist the geographical movement of similar jobs.
We have had a short but significant debate. I pay tribute to the work force in Scotland who, along with our infrastructure, education system and environment, are one of our greatest means of attracting people to Scotland.
We now move to another stage of the devolution settlement—not only the concordats, but the joint action committees. We have established co-operation and partnership in practice, and we are aiming to deliver. We now move from the joint action committee on poverty to that on the knowledge economy. That subject is vital, as is the fact that we are working in partnership. That partnership approach will ultimately be backed by, and to the benefit of, the people of Scotland.

It being Seven o'clock, MR. DEPUTY SPEAKER proceeded to put forthwith the deferred Questions which he was directed by paragraphs (4) and (5) of Standing Order No. 54 (Consideration of estimates) to put at that hour.

ESTIMATES, 1999-2000

Class III, Vote 6

Resolved,

That a sum, not exceeding £511,039,000, be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charge for the year ending on 31st March 2001 for expenditure by the Department of the Environment, Transport and the Regions on support to nationalised industries; grants to Railtrack, British Rail, London Transport, Docklands Light Railway, DoA Ltd; MRPS grant; payments in respect of expenditure relating to the Channel Tunnel Rail Link; expenditure connected with the privatisation of British Rail Business; other consultancies; expenditure relating to Commission for Integrated Transport; capital expenditure by transport industries funded by EC grants; railway industry and National Freight Company pensions funds; National Freight Company travel concessions; rebate of fuel duty to bus operators; ports and shipping services; Royal Travel; miscellaneous services; civil aviation services; international aviation services; transport security; freight grants, and expenditure associated with the non rail privatisation programme.

Class XIII, Vote 1

Resolved,

That a sum, not exceeding £5,810,419.000, be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charge for the year ending on 31st March 2001 for expenditure by the Scotland Office on administrative costs

and operational costs; electoral publicity; the Parliamentary Boundary Commission for Scotland; other devolution costs, including the panel to oversee the cross-party electoral expenditure agreement and on a grant to the Scottish Consolidated Fund.

It being after Seven o'clock, MR. DEPUTY SPEAKER proceeded to put forthwith the Questions which he was directed by paragraphs (1) and (2) of Standing Order No. 55 (Questions on voting of estimates etc.) to put at that hour.

ESTIMATES, 1999–2000 (ARMY) VOTE A

Resolved,

That during the year ending on 31st March 2000 an additional number not exceeding 10,620 all ranks be maintained for Service in the Reserve Land Forces.

SUPPLEMENTARY ESTIMATES, 1999–2000

Resolved,

That a supplementary sum, not exceeding £3,773,575,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges for civil services which will come in course of payment during the year ending on 31st March 2000, as set out in HC 4 of Session 1999–2000.

ESTIMATES, 2000–01 (VOTE ON ACCOUNT)

Resolved,

That a sum, not exceeding £101,653,019,000, be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charges for civil and defence services in Classes I and II; Class III Votes 1 to 5 and Votes 7 to 12; Classes IV to XII; Classes XIV to XVIII; and Classes XVIII, A and XVIII, B for the year ending on 31st March 2001, as set out in HC 5, 6 and 7 of Session 1999–2000.

Ordered,

That a Bill be brought in on the foregoing resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer. Mr. Andrew Smith, Dawn Primarolo, Miss Melanie Johnson and Mr. Stephen Timms do prepare and bring it in.

CONSOLIDATED FUND BILL

Mr. Stephen Timms accordingly presented a Bill to apply certain sums out of the Consolidated Fund to the service of the years ending on 31 March 2000 and 2001: And the same was read the First time; and ordered to be read a Second time this day, and to be printed [Bill 32].

CONSOLIDATED FUND BILL

Order for Second Reading read.

Question, That the Bill be now read a Second time, put forthwith, pursuant to Order [14 December] and Standing Order No. 56 (Consolidated Fund Bills), and agreed to.

Bill accordingly read a Second time.

Question, That the Bill be now read the Third time, put and agreed to.

Bill accordingly read the Third time, and passed.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

LEGAL AID AND ADVICE

That the draft Legal Advice and Assistance (Scope) (Amendment) Regulations 1999, which were laid before this House on 1st December, be approved.—[Mrs. McGuire.]

Question agreed to.

Dangerous Driving (Sentences)

Motion made, and Question proposed, That this House do now adjourn.—[Mrs. McGuire.]

Mr. Tim Loughton: I am pleased to have secured this debate. The case that I am about to recount was instigated by the poignant and completely unnecessary death of a young police officer in my constituency in April, but the injustice that it represents will be familiar to many hon. Members in constituencies throughout the country.
Last year, I secured an Adjournment debate on death on the roads in my constituency, but that concerned accidents on a dangerous stretch of the A27 between Lancing and Worthing, whereas what occurred last April was entirely avoidable: the tragic death of a police officer at the hands of a convicted felon, driving recklessly and dangerously.
Just before midnight on the evening of Saturday 24 April, PC Jeff Tooley, aged 26, a police officer based at Shoreham and living in my constituency, was carrying out his duty perfectly properly, manning a speed check on the Brighton road. He was wearing a highly visible fluorescent uniform and holding a torch. In no way could he be described as the author of his own misfortune. He moved out to stop a white Renault van clocked at 51 mph in a 30 mph zone; but the van did not stop or decrease its speed. Subsequently, it hit him, lifting him off the ground and depositing his body about 70 ft further along the road, before speeding off.
It was claimed that the 48-year-old driver of the van, from Brighton, had been drinking and fell asleep at the wheel, but subsequently the van was found burned out in nearby Hove: hardly the act of a driver suffering from tiredness and drunkenness. Some 12 hours after the incident, PC Jeff Tooley succumbed to his injuries and died in Worthing hospital. I am grateful for the comments of the Minister at the time, who paid tribute to PC Tooley when I raised the case on the Monday immediately after that tragic event.
The case gained a high profile because the victim was a police officer doing his duty. However, the circumstances and subsequent judicial procedures should be viewed no less seriously than if it had been a pedestrian hit by the van while crossing the road on his or her way home.
PC Tooley is said to be the first serving police officer in the Sussex constabulary to have lost his life in the line of duty. His family and his colleagues at Shoreham police station and throughout the Sussex force were understandably devastated. At a packed funeral in Chichester cathedral, which I attended, seasoned and long-serving police officers, including the chief constable himself were reduced to tears. Jeff Tooley was greatly liked in his force. He was described as an experienced, committed and highly motivated officer. He had held a burning ambition to become a police officer and joined the force in 1990. He had an exemplary record and a promising career ahead of him. At his funeral, an epitaph to Constable CT483 read simply,
When one of us falls, the rest of us stumble.
The waste of such a promising young life, with so much to live for, was distressing enough, but the grief felt by family and friends has been compounded by the

subsequent shortcomings of the justice system in dealing with the driver who caused PC Tooley's death. His family were also especially distressed that his organs could not be used to save the life of another, because the guilty party fled the scene of the crime and PC Tooley's body had to be made available for legal reasons.
Three days after Jeff Tooley's death, the killer turned himself in, although by that stage the police were well aware of his identity. At the subsequent hearing, he denied causing death by dangerous driving and performing an act intended to pervert the course of justice—setting fire to the van—and pleaded not guilty. However, on 11 November before the case came to court, the killer changed his plea to guilty. Subsequently, he was sentenced to seven years imprisonment.
The maximum penalty available to the sentencing judge was just 10 years, and he was obliged to reduce that because of the 11th-hour change of plea to guilty. Indeed, up to 1993, the maximum penalty was just five years. After time spent on remand is taken into account, the killer will be eligible for parole in just three years. That is despite the fact that he has a long criminal record, stretching back to 1966, including a seven-year prison sentence in the 1970s for attempted robbery and eight years in the 1980s for robbery.
The comments of the sentencing judge struck a chord with many people who followed the case. Judge Anthony Thorpe at Chichester crown court said:
Parliament has decided that the maximum penalty for death by dangerous driving is 10 years, whereas the maximum penalty for burglary is 14 years…that might strike the public as an odd approach to the value placed on human life.
I agree, as do the many hon. Members—of all parties, and from Sussex and the rest of the country—who have signed my early-day motion on the subject.
If that criminal had stolen PC Tooley's car that night, or broken into his home but left him unscathed, he would have faced a sentence of up to 14 years' imprisonment, instead of a maximum of 10. Patently, there is a grave inconsistency in our legal system's treatment of dangerous driving offences. It is increasingly perceived to be unfair and to undermine the seriousness with which that crime is taken and prosecuted. This case has shown that clearly and that is why we believe that the courts should have available the possibility of imposing a life sentence on the worst cases of death by dangerous driving. This case would appear to qualify as just such a one.
My view is born not out of some knee-jerk wish to seek revenge but out of a desire to ensure that dangerous driving is taken far more seriously as the life-threatening act that it can be, and to ensure that the severity of the penalties available act as a real deterrent and highlight the unacceptability of dangerous driving which, in the extreme, can lead to an innocent person's death. The killer may well not have set out to cause the death of a policeman on that night but, despite the lack of obvious intent, someone who spends an evening drinking heavily in a pub and then speeds home on a dangerous stretch of road at 51 mph should be no less responsible for his actions and the result of his recklessness than if he had set out to cause the death with intent. A motor vehicle in irresponsible hands is a lethal weapon—no less potent than a gun or a knife. In this day and age, citizens who qualify to drive and exercise that right should be fully responsible for the effects of exercising that right.
Let us consider the statistics. Between 1993 and 1996, the average penalty for death by dangerous driving was just 33.7 months. That compares, over the same period, with the average penalty for manslaughter of 62 months. Between 1993 and 1996, there were 1,989 convictions for the charge of death by dangerous driving, but only 47 of those cases were given terms of imprisonment of five years or more. In fact, the terms had been rising, but fell back in 1996.
More recently in 1997, 205 people were convicted of causing death by dangerous driving, but the average sentence for the 125 of them convicted in Crown courts was again just 33 months.

Mr. Andrew Miller: Will the hon. Gentleman give way?

Mr. Loughton: May I proceed and perhaps give way later?
At a time when road traffic deaths are falling, the number of successful prosecutions for death by dangerous driving seems to be falling disproportionately faster, and the subsequent sentences remain stubbornly unconvincing. It is clear that, because it is often difficult to get a charge of death by dangerous driving to stick, the charge often drops to the lesser crime of careless driving. That may have been the point that the hon. Gentleman was about to make. Careless driving is the more usual offence brought after a road death and it relates only to the standard of driving and excludes the death.
I wish to pay tribute to the hon. Member for Peterborough (Mrs. Brinton) who highlighted the gap in the law and expressed the need for an intermediate offence between death by dangerous driving and driving without due care and attention. I was happy to support the campaign that she launched, together with her local newspaper the Peterborough Evening Telegraph, earlier in the year. I thank the road traffic victim charity, RoadPeace, for the information that it has provided. It says:
The principle that a driver is not responsible for the consequences of his actions is contrary to the public interests—it must have an effect on driver behaviour.
Some experts say that the current penalty system for death by dangerous driving militates against the crime being properly investigated with the necessary resources. Nicholas Atkinson QC believes that too many cases involving causing death on the roads are not properly investigated and often end up being charged as driving without due care and attention. Increasing the maximum available sentence could mean that greater attention would be paid to the investigation, the prosecution and the sentencing of offenders involved in death crashes.
The Parliamentary Advisory Council for Transport Safety, in a long report published in July which I commend and which was entitled "Road Traffic Law and Enforcement", agrees with that view. It claims:
Bad driving offences, especially those involving death, are often not being dealt with in a manner which signals to society that such offences are a serious matter.
It must be right that the appropriate charge should be one that makes the death and culpability for the death the issue, rather than determining a standard of driving. In many cases, the circumstances of the incident include

matters such as leaving the scene of the crime, as happened in the case of PC Tooley, that do not relate to the standard of driving.
Making a life sentence award available to a judge, purely at his or her discretion, for the very worst cases would not tie his or her hands but rather enable the courts to recognise the real seriousness of the crime of causing death by dangerous driving because, as the Jeff Tooley case so vividly illustrates, low sentences are a symptom of the low priority given to death and injury on our roads, not the totality of the problem.
In the United States, for example, and in many European Union countries, a charge of homicide would result, and it is time that we empowered the courts to send out a clear signal in this country that there will be zero tolerance of such behaviour and that responsible, law-abiding citizens have a right to protection from those who persist in flouting the law in such an extreme manner.
The Jeff Tooley case has struck a particularly strong chord with many people in Sussex. I am grateful to the local media, particularly the Brighton Evening Argus, for giving the case such a high profile. The Argus launched its "Justice for Jeff' campaign last month in horror at the apparent injustice meted out to the seasoned criminal who killed him. Like me, the local media want life sentences available for the worst cases of causing death by dangerous driving.
Such a change in the law will not, alas, bring back my constituent or the many hundreds of others killed in appalling circumstances while lawfully going about their business or performing their jobs. Some of the worst cases involve children who come into contact with dangerous drivers while crossing the road on the presumed safety of a pedestrian crossing.
However, a change in the law might just act as a deterrent. Making dangerous drivers think twice about the consequences of their irresponsible behaviour might prevent more such tragic waste of promising young lives. I hope that the Minister will agree to meet a delegation made up of my constituents, families of victims, road safety groups and the police—all of whom support the change in the law that I have set out.
If the Government take this anomaly in the law seriously, and if we make progress towards achieving the change that I have described, my constituents at least will be able to say that justice for Jeff has been achieved in part, and that something positive will have come from his senseless and tragic death.

Mrs. Helen Brinton: rose—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I cannot call the hon. Lady unless I have had notice that both the hon. Member who has secured the Adjournment debate and the Minister agree to her participation. It is a courtesy to let such participation be known to the Chair beforehand, but, as the hon. Member for East Worthing and Shoreham (Mr. Loughton) and the Minister are both signifying that they agree to her making a contribution, I call the hon. Member for Peterborough (Mrs. Brinton).

Mrs. Brinton: I apologise, Mr. Deputy Speaker, for being remiss in not contacting you on this matter,
although I have been in touch with the hon. Member for East Worthing and Shoreham (Mr. Loughton) and my hon. Friend the Minister.
I congratulate the hon. Member for East Worthing and Shoreham on securing a debate on this important subject, and on the way in which he has pressed his case tonight. I fully support his contention that the penalty for causing death by dangerous driving is inconsistent with the penalties for other crimes, such as those that he has described eloquently to the House this evening.
I know that the hon. Gentleman is aware of, and has supported, the campaign being run by the Peterborough Evening Telegraph in my constituency to change the law in a subtly different way. I am also aware of, and support, the excellent campaign "Justice for Jeff' that he is spearheading, along with the Brighton Evening Argus, which deals with dangerous driving matters. The hon. Gentleman provided very able support earlier this year to the campaign in Peterborough, which aims to increase the maximum penalty available in such cases, and to make the whole range of penalties fit the crime.
The Evening Telegraph began its campaign to bring justice to the families of victims such as Glenn Jones, a 24-year-old Peterborough man killed on the road. The driver's cursory and trivial punishment was a fine of £250 and nine penalty points on his licence. What price human life unless we change the law?
The hon. Gentleman is at the forefront of all campaigns to make our roads safer. I hope that the debate this evening and the additional matters that I have raised briefly will find a resonance with my hon. Friend the Minister.

The Minister of State, Home Office (Mr. Charles Clarke): I begin by congratulating the hon. Member for East Worthing and Shoreham (Mr. Loughton) on the very effective and powerful way in which he put his case, for which I have immense sympathy. I assure him that I should be more than happy to receive a delegation, led by him, of those involved in the "Justice for Jeff" campaign.
Since I have been a Minister, I have received a delegation led by my hon. Friend the Member for Peterborough (Mrs. Brinton). I have also met a number of the various other organisations campaigning for change in this area. The House may be interested to know that this is not a matter raised by only a few isolated hon. Members: more than 20 hon. Members have written to Home Office Ministers over the past year or so about similar cases in their constituencies. Concern over the matter is widespread, and the hon. Gentleman is right to raise it in this debate. He made a powerful speech.
I should like to take this opportunity to express the condolences of the whole House to the family and friends of Jeff Tooley, whose life was lost in such a terrible way. The fact that he was a policeman means that the force of the tragedy is that much greater for me, given my responsibilities for the police. However, as the hon. Gentleman mentioned, many people lose their lives in that tragic and appalling manner.
The criminal law can contribute to a response to this terrible state of affairs. I welcome the opportunity to debate the subject this evening. No one can dispute the
seriousness of the consequences when death is the result of a crash on the roads. Criminal law must address the extent of the offender's culpability. The Government have the duty to make available to the Crown Prosecution Service, the police and the courts offences appropriate to the degree of culpability of the driver in the circumstances in question. As the hon. Gentleman said, in some cases there is a difficulty that, in law, the offender has been defined as acting carelessly rather than intentionally, but the consequences of his act are disproportionately serious. That has given rise to the concerns raised in today's debate. It is especially likely that families will feel aggrieved at the outcome of such a case.
It is worth setting out the current framework of the law. The North committee looked at all these matters and reported on this issue in 1988. It addressed concerns that the law relating to road traffic accidents had not developed satisfactorily. The committee gave detailed consideration, among a wide range of other things, to the possibility of creating a new offence of causing death by careless driving, but concluded that it would be wrong to visit on a driver severe penalties for unforeseen tragic consequences if his or her actions were careless.
During the past 10 years or so, that view has been accepted by Governments. Where the driving which resulted in death is thought to be only careless, there is no causing death offence, unless the offender was driving while under the influence of drink or drugs. By 1991, a consensus had emerged that the consumption of drink or drugs before driving carelessly was an aggravating factor which justified treating this behaviour more severely if a death were to result. The Government are actively reviewing the question of whether a new offence of causing death by careless driving should be introduced. The arguments are powerful and need to be reconsidered in the light of the whole debate that has taken place.

Mr. Miller: I have been following the debate with great interest in view of my role in RoadPeace. Will my hon. Friend re-examine the March 1996 Law Commission report on involuntary manslaughter? It may provide the answer to some of the searching questions asked by the hon. Member for East Worthing and Shoreham (Mr. Loughton).

Mr. Clarke: I take this opportunity to pay tribute to my hon. Friend for the work that he and RoadPeace have been doing to raise these issues. He makes a serious suggestion which needs active consideration.
Within the current framework of law, the CPS role is to decide how to view the case. To do this, it must look at the evidence and decide whether sufficient evidence to establish guilt of a particular offence exists. It is a matter for the CPS, which is independent of government, and it is not appropriate for me or any Minister to comment on or interfere in the decisions on the charges to bring in a particular case.
The Attorney-General is involved if there is unduly lenient sentencing which could undermine public confidence in the criminal justice system. Courts do not always make full use of their powers. The Attorney-General has powers to refer cases of indictable offences, including causing death by dangerous driving, to the Court of Appeal where it appears that the sentence was unduly lenient. The Court of Appeal then has power


to increase the sentence. That must be done within 28 days of the last sentence in the case being passed. The Court of Appeal can impose a higher sentence only if it finds that the sentence was unduly lenient.
I now come to sentencing guidelines. Obviously, there is a wide range of practice across the country on these matters. The Government are keen to promote consistency in sentencing. It is only right that offenders should be treated equitably and that inappropriate regional variations in sentencing should be avoided wherever possible. The Crime and Disorder Act 1998 established provisions which place a statutory duty on the Court of Appeal whenever it receives an appeal against sentence to consider whether it should frame a new sentencing guideline or revise an existing guideline.
The Act established a sentencing advisory panel to provide advice on such guidelines to the Court of Appeal. The panel will provide the court with statistical information about existing sentencing and consult a range of interested parties. The panel can act in three sets of circumstances: when advised by the Court of Appeal that it intends to frame a guideline, at its own instigation, and when the Home Secretary directs it to provide views to the court. This is an important development since the 1998 Act, designed to establish consistency of sentencing. It is a matter for consideration whether such sentences might be examined by the panel.
The Government are responsible for ensuring that the courts have the powers that they need to deal with the cases before them. We believe that the law should provide appropriate sanctions to enable the courts to deal severely with instances of bad driving that are worse than careless and in which the offender bears a greater responsibility for his actions.
Within the broad statutory limit set by Parliament, individual sentences are a matter for the courts alone, taking into account all the circumstances of the offence and the offender. Of course, the independence of our courts is an important principle. It is not appropriate, therefore, for me to interfere in specific cases and sentences passed in particular circumstances. However, I believe that Parliament and the public are entitled to expect the courts to impose long and heavy sentences in serious cases.
The maximum penalty for causing death by dangerous driving or causing death while under the influence of drink or drugs is 10 years' imprisonment. That was doubled from five years as recently as 1993. The maximum penalty for dangerous driving is two years' imprisonment. Careless driving carries a maximum fine of £2,500 and an obligatory endorsement of the offender's driving licence. I can well understand why, when someone causes a death by careless driving and a fine of this kind is imposed, real despair and anger is felt among the families concerned. It is an understandable response, which I share.
The Government decided to conduct a review of penalties in road traffic offences, which is taking place. It will include consideration of the maximum penalty for

causing death by dangerous driving, and we shall deal with some of the issues discussed. The provisions will, I hope, lead to more comprehensive sentencing guidelines, which will ensure greater consistency in sentencing. The offence of causing death by dangerous driving could be one of the offences considered in this way.
The Government are determined to address these issues very seriously as a matter of priority. They represent an important element in public confidence in the criminal justice system, and need to be properly addressed. I assure the House that the opinions expressed in the contributions to this evening's debate will be fully considered in the review.
Lord Whitty today announced a new speed camera funding system, with eight pilot schemes in Essex, Northampton, Thames valley, Nottingham, south Wales, Cleveland, Lincolnshire and Strathclyde. It will establish a much more coherent and effective regime for testing for people who are speeding, and will be able to identify and, we hope, deter speeding. That is an important and positive development, which will inhibit the reckless and speedy driving that is sometimes the immediate cause of the accidents that cause the tragedies which have been discussed.
Finally, I want to mention research. Road traffic law should provide a framework for safe driving, lay down clear standards for driver behaviour and deter drivers from breaching those standards. The Transport Research Laboratory of the Department of the Environment, Transport and the Regions is carrying out research on behalf of DETR into the way in which bad driving cases proceed through the criminal justice system. It is the intention of the research to obtain evidence as to whether there is sufficiently clear guidance on the law and its purpose, and how that affects the choice of penalty.
The researchers are looking in detail at the decisions taken by the police, the Crown Prosecution Service and the courts. We expect to have the results next year, when the Government will be in a better position to judge changes in this area of law and its operation.
I welcome the fact that the hon. Member for East Worthing and Shoreham secured this debate. The Government are fully in sympathy with the sentiments expressed by the hon. Gentleman and others during the debate. My Department and I will continue to work with colleagues from other Departments to ensure that we get our policy right in tackling these important and serious issues. I am glad to have had an opportunity to respond to the debate, and I am delighted to assure the hon. Gentleman that I shall receive a delegation to discuss the matter more widely and will continue to meet and discuss the issue with a wide range of different organisations.
In moving on these matters, it is exceptionally important to be in line with the body of public opinion. Law should properly reflect what people feel. That is why this debate has been important. The whole range of views expressed will be fully taken into account.

Question put and agreed to.

Adjourned accordingly at half-past Seven o'clock.